India’s Crypto Payment Crackdown Sends USDT Premium Soaring to 8.5%

USDT, a stablecoin issued by Tether and pegged to the U.S. dollar, is commonly used in India to trade other crypto assets or make cross-border remittances. Limited local supplies of dollar-denominated assets, a 30% tax on crypto gains and a 1% withholding tax on transactions had already pushed its local price 3%–4% above the official dollar exchange rate. Investigations into supply channels have directly raised the cost for investors seeking U.S. dollar exposure.

India’s Enforcement Directorate searched six premises in Bengaluru on June 17 under the Foreign Exchange Management Act, targeting five companies including Transak and Carret. The agency accused them of transferring more than 25 billion rupees through USDT without authorization from the Reserve Bank of India. USDT traded at 102.88 rupees on June 27, compared with the official dollar exchange rate of 94.65 rupees, a premium of more than 8.5%. By June 30, premiums across multiple platforms had reached 7%–10%.