USDT, the world’s largest dollar-denominated stablecoin, trades well above face value on Indian crypto platforms. While local reports attribute the premium to a recent enforcement action, exchanges explain it as simple supply-demand dynamics.
The stablecoin’s premium rose to 7%-10% above its dollar value on Indian platforms over the weekend. At one point, USDT was trading around ₹102.88 against an official dollar-rupee rate of around 94.65 per USD. USDT’s market capitalization stood at $184.68 billion at the time of writing, making it the world’s largest dollar-pegged stablecoin.
This difference, known as the USDT premium, usually runs between 3% and 4%. In short, it’s the extra rupees buyers pay for dollar exposure through USDT instead of through a bank. The premium expands when local demand exceeds the supply of tokens actually available for trading.
The increase followed action by India’s Enforcement Directorate on USDT payments, the country’s financial crime agency said, CoinDesk reported Monday.
Now, exchanges are responding to the premium increase, and their explanations closely match that supply-side account.
The market clears higher
Minal Thukral, executive vice president of Mumbai-based CoinDCX, called the premium a function of the depth of the local order book relative to the global dollar reference price.
“The INR price of USDT is set by local order book depth and the global dollar reference. India has structurally been a net buyer of crypto, so local INR demand often runs ahead of available sell-side liquidity. When that liquidity is thinner near the global reference price, the market clears higher,” Thukral told CoinDesk.
