USDT traded at an 8.5% premium in India after regulatory action reduced stablecoin inflows. Enforcement Directorate scrutiny of cross-border crypto transfers tightened local USDT supply. Stro
India’s stablecoin market is facing supply squeeze after USDT premiums climbed above 8.5%, according to The Economic Times. On Saturday, USDT traded at ₹102.88, while the official USD/INR exchange rate closed at ₹94.65 on June 27. The increase followed a slowdown in USDT inflows after the Enforcement Directorate intensified scrutiny of virtual digital asset transactions linked to ₹250 billion in money transfers.
The premium increase emerged shortly after the Enforcement Directorate's action against entities involved in crypto-based cross-border transfers. According to The Economic Times, those channels had supplied large amounts of USDT to India for several years.
Many non-resident Indians used USDT to transfer funds to relatives in India. The method often offered faster settlements and higher rupee returns than traditional banking routes. However, the Enforcement Directorate believes such transfers may violate the Foreign Exchange Management Act.
The agency also oversees compliance under the Prevention of Money Laundering Act. As scrutiny increased, market participants reported lower stablecoin inflows. Consequently, available USDT supply tightened across the local market.
Alongside reduced supply, regulatory concerns appear to have widened the premium. According to Purushottam Anand, founder of Crypto Legal, uncertainty often creates additional costs for market participants.
Anand said Indian exchanges have historically traded many virtual digital assets above global prices. However, he noted that increased scrutiny of cross-border transactions may have added a risk premium.
As a result, traders appear willing to pay more for access to dollar-linked liquidity. Notably, the premium moved well above its usual 3% to 4% range. The sharp increase also suggests that demand for stablecoins remains strong despite the supply slowdown.
While supply conditions remain tight, policymakers continue reviewing the sector. According to Sudhakar Lakshmanaraja, founder of Digital South Trust, India’s Parliamentary Standing Committee on Finance will meet the Reserve Bank of India and ICAI on July 2.
The discussions will focus on the future of cryptocurrency regulation. Lakshmanaraja also noted that OECD data placed India among countries with significant crypto flows.
In addition, Financial Intelligence Unit scrutiny of crypto over-the-counter transactions continues. Meanwhile, stablecoins remain central to crypto trading because traders use them to purchase assets such as Bitcoin and Solana.
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