USDT, the world's largest dollar-pegged stablecoin, is trading well above its $1 peg on Indian crypto platforms. While local press links the premium to a recent Enforcement Directorate action, exchanges are telling a simpler story: supply and demand.
The premium climbed to 7%-10% over the past weekend. At one point, USDT traded at about ₹102.88 against an official dollar-rupee rate of roughly 94.65. USDT's market cap currently stands at $184.68 billion, cementing its status as the top dollar-pegged stablecoin.
The normal USDT premium in India runs between 3% and 4%. It represents the extra rupees buyers pay for dollar exposure via USDT rather than through a bank. The gap widens whenever local demand outpaces the supply of tokens actually available for trade.
The spike followed an announcement by India's Enforcement Directorate regarding USDT payments, as reported by CoinDesk on Monday. However, exchanges are pushing back against a purely regulatory narrative.
CoinDCX: Order Book Depth Drives the Price
Minal Thukral, executive vice president of Mumbai-based CoinDCX, told CoinDesk that the INR price of USDT is set by local order-book depth relative to 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.” He added that the premium becomes a signal of the local arbitrage band — how expensive or slow it is for liquidity providers to replenish supply and close the gap.
In plain terms, more people in India want to buy USDT than sellers are willing to sell near the global price. When that imbalance grows, the price Indian buyers pay rises until the market finds a new equilibrium.
CoinSwitch: Not Unique to Any Single Platform
Ashish Singhal, co-founder and CEO of CoinSwitch, gave a more detailed account, stressing that exchanges do not manually set USDT prices. “As with any actively traded asset, when demand outpaces available supply, prices adjust accordingly. The USDT premium is therefore not unique to any single platform; it reflects broader market dynamics, including liquidity conditions and the availability of dollar-backed digital assets.”
Singhal noted that this phenomenon isn't exclusive to India. Stablecoins have traded at premiums in several markets during periods of elevated demand or liquidity constraints. Over recent days, USDT has traded at a premium across several Indian exchanges, with the gap generally falling between 7% and 10%, depending on liquidity and market activity.
The exchange commentary refocuses the conversation from regulatory fear to basic economics: when demand outstrips supply, price goes up.