USDT Premium Skyrockets in India Amid Supply Shortage

Tether (USDT), the largest dollar-pegged stablecoin, has been trading at a premium in India due to a supply and demand imbalance. The USDT price in Indian rupees has diverged from its nominal price on local crypto platforms, with a gap of around 7-10% over the weekend.

This premium is not unusual for USDT, which has traded at a higher price than its global benchmark in other markets as well. However, the current situation in India is attributed to a shortage of sellers and limited liquidity on local platforms.

According to Minal Tukral, executive vice president of CoinDCX in Mumbai, the premium reflects the depth of the local order book and the global dollar benchmark price. He explained that India remains a net buyer of cryptocurrency, leading to increased demand for USDT in Indian rupees.

Ashish Singhal, co-founder and CEO of CoinSwitch, also emphasized that the premium is not set by platforms manually but is determined by trades between buyers and sellers. He noted that exchanges do not charge hidden fees above stated brokerage fees, and the premium reflects current market conditions.