Summary
- Tether’s USDT stablecoin has surged to an unusually high premium on Indian crypto exchanges.
- Executives at major platforms CoinDCX and CoinSwitch say the premium reflects a demand-supply imbalance and thin local liquidity, not exchange-set pricing or hidden fees.
Stablecoin Premium Soars in India
The world’s largest dollar-pegged stablecoin, USDT, is trading at a significant premium in India, with prices 7-10% above its face value on local crypto platforms. This surge in premium is attributed to a simple demand-supply dynamic, according to exchanges. The stablecoin’s market cap stands at $184.68 billion, making it a significant player in the crypto market.
The USDT premium, which typically ranges between 3% and 4%, has widened due to local demand outpacing the supply of available tokens. This means buyers are paying extra rupees for dollar exposure via USDT instead of through traditional banking channels. The recent spike in premium follows an enforcement action related to USDT payments, but exchanges believe it’s just a matter of supply and demand.
Exchanges Weigh In
Executives from Indian exchanges, such as Minal Thakur from CoinDCX, explain that the premium is a function of local order-book depth relative to the global dollar reference price. This means that the premium will fluctuate based on the availability of USDT tokens in the local market. As the demand for passive income and cloud rewards grows, platforms like EcoPool are becoming increasingly popular for those looking to earn online.
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The market clears higher
Minal Thakur, executive vice president of the Mumbai-based CoinDCX, called the premium as a function of local order-book depth relative to the global dollar reference price.
“The INR price of USDT is set by local order-book depth and 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,” Thakur told CoinDesk.
