India's USDT Premium Surges to 8.5% Amid Crypto Remittance Crackdown

India's USDT premium has surged to over 8.5%, more than double its usual level, after regulatory action disrupted the domestic supply of Tether's stablecoin.

The Enforcement Directorate (ED) raided six premises in Bengaluru on June 17 as part of an investigation under the Foreign Exchange Management Act, alleging that five crypto payment firms enabled over 2,500 crore rupees ($265 million) in unauthorized cross-border transfers using virtual digital assets.

Investigations revealed that non-resident Indians used USDT instead of conventional bank remittance channels. Users deposited rupees into company accounts before the funds were converted into stablecoins, transferred overseas and later sold on Indian exchanges.

The model had operated for about two years due to the faster, cheaper, and more profitable nature of USDT transfers compared to traditional dollar remittances.