USDT, the world’s largest dollar-pegged stablecoin, is trading well above its face value on Indian crypto platforms. While local reports attribute the premium to a recent enforcement action, exchanges explain it as a simple supply and demand dynamic.
The stablecoin’s premium rose by 7% to 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 about 94.65 per dollar. The market capitalization of USDT was $184.68 billion at the time of writing, making it the largest dollar-pegged stablecoin in the world.
That gap, known as the USDT premium, typically ranges between 3% and 4%. Simply put, it is the additional rupees that buyers pay for exposure to the dollar through USDT rather than through a bank. The premium widens every time local demand exceeds the supply of tokens actually available for trading.
The increase followed action by India’s Enforcement Directorate related to USDT payments, the country’s financial crimes agency said, CoinDesk reported on Monday.
Now, stock markets are responding to rising premiums, and their explanations align closely with that supply-side account.
The market clears up
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 based on the depth of the local order book and the global dollar reference. India has structurally been a net buyer of cryptocurrencies, so local demand for INR often lags ahead of available sell-side liquidity. When that liquidity is lower near the global reference price, the market clears higher,” Thukral told CoinDesk.
