Executives from leading platforms CoinDCX and CoinSwitch attribute the premium to supply-demand discrepancies and limited liquidity.
By Omkar Godbole Jun 30, 2026, 4:59 a.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Indian flag (Naveed Ahmed/Unsplash)SummaryShow- The USDT stablecoin has seen its premium rise to over 8.5% on Indian exchanges, far exceeding the usual 3% to 4% range.
- Executives from CoinDCX and CoinSwitch claim this premium is a result of supply-demand imbalances and low local liquidity rather than any hidden fees.
The USDT stablecoin is currently trading at a significant premium in India, with local exchanges noting that the increase is primarily due to a mismatch between supply and demand. This comes amid reports of regulatory actions impacting the cryptocurrency landscape.
Over the past weekend, the premium for USDT surged to between 7% and 10% above its dollar value on Indian exchanges. At one point, it was priced at roughly ₹102.88, while the official dollar-to-rupee rate was around 94.65. The market capitalization of USDT was recorded at $184.68 billion, confirming its status as the largest dollar-pegged stablecoin globally.
This premium, typically between 3% and 4%, represents the additional rupees buyers pay for accessing dollar exposure through USDT rather than through traditional banking methods. The premium tends to increase when demand for tokens exceeds the supply available for trading.
This recent spike followed actions by India's Enforcement Directorate concerning USDT transactions, as reported by CoinDesk on Tuesday.
In response to the increasing premium, exchanges have reiterated that the situation is primarily due to supply-side factors.
The Market Adjusts
Minal Thakur, CFO at CoinDCX in Mumbai, explained that the premium reflects the depth of local order books compared to global dollar prices.
"The INR price of USDT depends on local order-book depth and the global dollar reference. India is generally a net buyer of crypto, leading to a situation where local demand often outstrips the available liquidity for sales. When this liquidity is limited around the global reference price, prices tend to rise," Thakur stated to CoinDesk.
"The premium indicates the local arbitrage band, reflecting the cost and speed for liquidity providers to replenish supply and correct the disparity," she added.
This means that there are more buyers for USDT in India than sellers willing to sell at prices close to the global rate. As this disparity grows, the price increases until a new equilibrium is reached.
Not Specific to One Exchange
CoinSwitch's co-founder and CEO Ashish Singhal provided further insights, clarifying that the premium is not set by the exchanges themselves.
"When demand exceeds the available supply for any actively traded asset, prices adjust accordingly. The premium for USDT is not confined to a single platform; it reflects broader market conditions, such as liquidity and the availability of dollar-backed digital assets," Singhal explained.
This situation is not exclusive to India, as stablecoins have experienced premiums in various markets during times of heightened demand or liquidity shortages. It's also crucial to note that exchanges do not manually set USDT prices; they emerge from trading activity between buyers and sellers on the platforms.
Recently, USDT has been trading at a premium across several Indian exchanges, with premiums generally fluctuating between 7% and 10%, influenced by liquidity and market dynamics. On CoinSwitch, the premium has hovered around 9% in recent days.
"At CoinSwitch, users can always see the live buy and sell prices prior to placing an order. We do not impose hidden fees beyond our stated brokerage. The premium is a reflection of current market conditions rather than an additional markup from the platform," Singhal added.
Both executives from CoinDCX and CoinSwitch attribute the premium solely to natural supply-and-demand dynamics, highlighting the imbalance of buyers versus sellers and the limited liquidity near the global reference price. They did not specifically comment on the ED's enforcement actions or their potential influence on token availability.
Nonetheless, the increase in the premium may indeed be linked to the enforcement actions, which could have led market makers and liquidity providers to reduce their USDT sourcing from abroad. This reduction would manifest as a liquidity shortage, consistent with the explanations provided by Thakur and Singhal.
Conducting business on Indian exchanges has become more challenging for market makers due to a flat 30% tax on profits, lack of loss offsets, and a stringent 1% tax deducted at the source (TDS). These regulations have historically contributed to market inefficiencies.
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