India USDT Premium Tops 8.5% as Crackdown Drains Stablecoin Supply

Tether’s USDT premium in India has surged past 8.5%, more than double its usual level, after a regulatory crackdown on crypto remittance operators disrupted the country’s stablecoin supply chain.

The Block, citing India’s Economic Times, reported on June 29 that USDT traded at 102.88 rupees apiece on local platforms over the weekend. That represented an 8.7% premium to the interbank dollar-rupee exchange rate of 94.65 rupees, far wider than the typical 3% to 4% spread.

The premium began widening after India’s Enforcement Directorate raided six premises in Bengaluru on June 17. The agency targeted five crypto payment companies for alleged violations of the Foreign Exchange Management Act, or FEMA, and alleged they handled 25 billion rupees, or about $265 million, of unlicensed cross-border transfers using USDT.

According to the Enforcement Directorate, the firms accepted rupee deposits into bank accounts, converted the money into stablecoins, transferred the funds abroad and sold them on Indian exchanges. The structure bypassed formal remittance procedures required under FEMA and anti-money laundering rules. The agency believes non-resident Indians used USDT in place of bank remittances.

The model had been widely used for about two years. Users were drawn by faster transfers, lower fees and a persistent premium that produced better rupee returns than bank channels. Since the raids, market makers and liquidity providers have cut back overseas USDT purchases, deepening the domestic supply shortage.

Regulatory scrutiny is also intensifying. India’s Parliamentary Standing Committee on Finance is scheduled to discuss the direction of virtual digital asset regulation on July 2 with the Reserve Bank of India and the Institute of Chartered Accountants of India. The RBI has long taken a cautious stance on crypto, and its governor has publicly warned about the risks tied to stablecoins and other digital assets.

The Financial Action Task Force said in a March report that 84% of the $154 billion in illicit crypto transactions in 2025 involved stablecoins. Separately, India ranked first for a third consecutive year in the 2025 global crypto adoption index, while crypto trading volume across South Asia rose 80% from a year earlier to about $300 billion between January and July 2025, according to TRM Labs.