USDT▲$0.9985 India premium has crossed 8.5% after a supply crunch tied to enforcement scrutiny over crypto-based money transfers.
USDT, the dollar-pegged stablecoin issued by Tether, normally trades close to $1 globally, but its premium in India has now climbed to about 8.5%, nearly twice the usual 3% to 4% range, as local regulatory pressure squeezes supply, The Economic Times India reports.
On Saturday, June 27, USDT was priced at ₹102.8 in India, or around $1.09 based on the interbank rate. But the U.S. dollar was at ₹94.6, indicating that one USDT fetched almost 8.7% premium above the USD/INR benchmark rate.
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According to The Economic Times, the increase came following the crackdown by the country’s financial crime enforcement authority, the Enforcement Directorate, on firms facilitating transactions of money inflow and outflow from India using USDT and other altcoins.
The scheme was allegedly exploited by certain non-residents of India for sending money to their families quickly and at a favorable rupee rate compared to normal bank transfers. But authorities believe that foreign exchange regulations may be breached by such cross-border crypto transactions.
USDT India Supply Tightens
The tightness of supply is now forcing market-makers to be extremely careful in bringing in USDT into India after the local regulator issued warnings regarding ₹2,500 crore ($264 million) of money transactions via crypto, per the report.
The surge in premium also comes at a time when India is in the midst of discussions to regulate crypto stricter.
Sudhakar Lakshmanaraja, founder of Digital South Trust, a crypto policy advocacy group, told The Economic Times India that stablecoins are now part of that policy fight, saying “regulation is no longer optional” as Indian agencies increase scrutiny of crypto misuse.
India’s Parliamentary Standing Committee on Finance is expected to meet the RBI and ICAI on July 2 to discuss the next steps.
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