A sudden USDT shortage has emerged in India, pushing the local premium on the stablecoin from the usual 3%-4% to more than 8.5%, according to The Economic Times.
The newspaper reported that USDT was trading at 102.88 rupees on Saturday, compared with a dollar-rupee exchange rate of 94.65 at the close of trading on Friday. The gap between the two rates reflects the elevated local premium.
Why the Shortage Emerged
The USDT premium began rising shortly after India’s Enforcement Directorate (ED) took action against entities that had helped the Indian diaspora use USDT. These channels were reportedly used to move funds into and out of the country while bypassing banks, including for less transparent transactions.
According to The Economic Times, many Indians living abroad had been sending USDT to their families instead of using dollar-based bank transfers. The method was faster, cheaper, and allowed recipients to get more rupees when selling USDT in India than they would through traditional bank conversions.
The decline in USDT inflows, along with fears of a further slowdown, reduced local supply and pushed the premium higher, the publication said. As a result, regulatory pressure had a direct impact on the domestic price of the stablecoin.
Regulatory Scrutiny Intensifies
Indian authorities are also tightening oversight of the cryptocurrency market. The Parliamentary Committee on Finance is set to meet with the Reserve Bank of India and the Institute of Chartered Accountants on July 2 to discuss next steps.
According to The Economic Times, the OECD has identified large cryptocurrency flows in India, behind only Korea and Vietnam. In addition to the ED, the Financial Intelligence Unit (FIU) is also monitoring over-the-counter cryptocurrency transactions.
The push for stricter regulation has also been supported by a FATF report, which said stablecoins accounted for 84% of illicit virtual asset transactions worth $154 billion in 2025. Amid rising crypto fraud, the publication noted, tighter controls in India are becoming increasingly likely.
