The premium for USDT in India has surged to 8.5%: ED raids triggered a liquidity crisis
On June 29, 2026, the Indian stablecoin market recorded an anomalous surge: the USDT premium reached 8.5%, nearly double the standard spread of 3–4%. On local platforms, the stablecoin was trading at 102.88 Indian rupees, while the interbank exchange rate against the dollar stood at 94.65 rupees. This is not just volatility — it is a direct signal of a structural liquidity deficit.
Cause: Law Enforcement Pressure on the Crypto Payment Sector
The sharp spike in the premium coincided with large-scale raids by India's Enforcement Directorate (ED). Law enforcement conducted searches at six premises in Bangalore, affecting five crypto payment firms. According to the ED, these companies facilitated unauthorized cross-border transfers using virtual digital assets. Specifically, non-residents of India allegedly used USDT as an alternative to bank transfers: rupees were deposited into the firms' accounts, converted into stablecoins, and then sold on Indian exchanges, bypassing the financial regulator's requirements.
The total volume of transactions cited in the ED's statement exceeds 25 billion rupees (~$300 million). This scheme operated for about two years, attracting users with speed, low fees, and a stable premium upon conversion. However, after the ED's statement, market makers and liquidity providers sharply reduced their purchases of USDT abroad, leading to an even greater contraction of supply on the domestic market and a widening of the spread.
Analytical Conclusion
The situation in India is a classic example of how regulatory pressure can instantly destabilize the stablecoin market. In conditions where the ED has effectively paralyzed USDT supply channels, the premium has become a reflection not only of demand but also of panic. If authorities continue to tighten controls, we may see the spread further increase to 10–12%, making the Indian market one of the most expensive for retail traders. I recommend market participants reconsider their hedging strategies and explore alternative liquidity routes before the regulator completes its campaign.