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ED Raids Tighten India's USDT Supply as Local Premium Tops 8.5%

Asset freezes on firms handling cross-border USDT transfers have tightened supply, lifting the domestic risk premium.

Overview

  • Local USDT quoted around ₹102.88 on June 28, a premium of roughly 8.5% over the interbank USD/INR rate of about ₹94.65, reversing the usual 3–4% markup.
  • India’s Enforcement Directorate searched premises tied to five mainly Bengaluru-based firms and froze related assets while alleging unauthorized cross-border USDT transfers under FEMA totaling more than ₹2,500 crore.
  • The raids disrupted a widely used pipeline that non‑resident Indians used to send USDT remittances into India, producing an immediate supply squeeze and higher entry costs for traders.
  • Market participants and a crypto lawyer said the premium reflects a regulatory risk price that deters arbitrage because importing USDT now carries legal exposure.
  • This shock builds on India’s 2022 crypto rules — a 30% tax on gains and 1% TDS on transactions — and follows FATF warnings about stablecoins, leaving on‑ramps constrained and making regulatory clarity the key thing to watch next.