USDT Sees 8.5% Premium in India After Regulatory Actions

The price of Tether's USDT (a stablecoin pegged to the U.S. dollar) surged to more than 8.5% above its dollar value on Indian exchanges due to a recent government crackdown on crypto payment firms. This situation arose after the Enforcement Directorate, India’s financial-crime agency, targeted several businesses in Bengaluru for allegedly facilitating over $265 million in unauthorized cross-border transactions using USDT.

On June 29, 2026, USDT traded at approximately 102.88 rupees against an official dollar-rupee rate of around 94.65. Generally, the price difference—known as the USDT premium—typically ranges between 3% and 4%, reflecting stronger local demand compared to supply. The crackdown, which involved searches at six locations under the Foreign Exchange Management Act, had a direct impact on the availability of the digital asset, exacerbating the existing premium.

According to reports, the Enforcement Directorate accused five crypto payment firms of operating an informal remittance channel that used USDT in place of traditional bank wires. This involved depositing rupees into company accounts, converting them into stablecoins, and then executing cross-border transfers. Such operations, which had been in place for about two years, attracted users due to their efficiency and lower costs compared to standard banking methods.

The tightening of USDT supply in response to regulatory scrutiny led market makers and liquidity providers to scale back on acquiring the stablecoin from international sources, further constricting local liquidity.

While the crackdown creates immediate challenges, some industry players are adapting to the changing landscape. For instance, Coinbase launched direct conversion services to Indian rupees last month, which may mitigate some reliance on peer-to-peer trading amid tight supply conditions. However, this action is said to target the off-ramp infrastructure that previously facilitated the USDT premium, leading to uncertainty about the availability of stablecoins in the Indian market going forward.

As the situation evolves, observers will want to monitor how the demand for USDT changes and whether regulatory actions will prompt further adjustments in cryptocurrency trading practices in India.