USDT premium in India tops 8.5% after ED raids

India’s USDT premium climbed above 8.5% after Enforcement Directorate raids disrupted the stablecoin supply chain. USDT traded at 102.88 rupees on local platforms while the interbank USD‑INR rate closed at 94.65 rupees. The typical spread has been about 3% to 4%.

The Enforcement Directorate conducted searches at six premises in Bengaluru on June 17 and targeted five crypto payment firms. Authorities allege the firms helped move more than 2,500 crore rupees (about $265 million) in unauthorized cross‑border transfers by converting rupees into stablecoins, transferring those assets abroad and selling them on Indian exchanges.

Investigators say non‑resident Indians deposited rupees into company accounts, had the funds converted into USDT, moved the tokens overseas and sold them on local platforms to avoid documentation and authorization required under the Foreign Exchange Management Act and anti‑money‑laundering rules. The model operated for roughly two years, investigators add, because USDT transfers were faster and cheaper than bank remittances and the domestic premium often produced higher rupee receipts on conversion.

Market makers and offshore liquidity providers reduced USDT purchases for the Indian market after the Enforcement Directorate’s actions and public statement. That withdrawal tightened domestic supply and widened the premium on peer‑to‑peer and exchange platforms.

Regulatory discussions are under way. The Parliamentary Standing Committee on Finance is scheduled to meet the Reserve Bank of India and the Institute of Chartered Accountants of India on July 2 to discuss policy on virtual digital assets. The central bank has maintained a cautious stance on cryptocurrencies and stablecoins and its governor has warned of related risks.

International bodies have identified stablecoins in illicit finance. A March 2026 Financial Action Task Force report attributed about 84% of the $154 billion in illicit virtual asset transaction volume recorded in 2025 to stablecoins, citing their liquidity and interoperability.

Crypto use in India has grown rapidly. India ranked first in global crypto adoption for the third consecutive year in 2025, and South Asia recorded an 80% year‑on‑year increase in crypto transaction volume to roughly $300 billion between January and July 2025. A major exchange launched direct rupee rails last month, providing an alternative to peer‑to‑peer stablecoin flows.

Financial intelligence authorities have tightened oversight of over‑the‑counter crypto deals, asking exchanges to preserve OTC records back to January 2026 and to flag transactions exceeding $10,000.

The Enforcement Directorate’s raids targeted the off‑ramp infrastructure that supported the stablecoin premium. Enforcement focus on cross‑border flows and OTC channels continues as regulators and lawmakers consider potential regulatory changes for virtual digital assets.