On June 29, the price of the stablecoin USDT in India rose to 8.5%, nearly doubling the usual spread value.
Over the weekend, USDT was sold on local platforms for 102.88 Indian rupees, compared to an interbank exchange rate of 94.65 rupees per dollar. Typically, the price difference is around 3-4%.
The local publication The Economic Times reported that the price increase is linked to raids conducted by the Enforcement Directorate (ED) of India. Law enforcement agencies carried out searches at six buildings in Bangalore.
The investigation targeted five crypto payment companies that allegedly facilitated unauthorized cross-border transfers through virtual digital assets.
ED claims that non-residents of India were using USDT as a substitute for bank transfers. Preliminary reports indicate that rupees were deposited into the companies' accounts, converted into stablecoins, and then sold on Indian exchanges, bypassing the country's financial regulatory body.
The total volume of transactions mentioned in the ED's statement exceeds 25 billion rupees (approximately 300 million dollars).
This model has been operating for about two years. Users were attracted by the speed and low cost of USDT transfers, as well as the potential to receive more funds through conversion at a stable premium.
Following the ED's announcement, market makers and liquidity providers reduced USDT purchases abroad, subsequently decreasing the supply in the domestic market and widening the spread.
It is worth noting that in January, Africa was the leader in spreads for converting stablecoins into fiat currencies.
