While stablecoins generally have much less volatility than traditional cryptocurrencies, they can also suffer violent moments. The world’s largest stablecoin Tether (USDT) recently went into a volatile state on the Indian crypto exchanges. This is primarily due to the renewed uncertainty around the situation of cryptos in the country.
Tether (USDT) came into being to help mitigate the volatility associated with digital assets. 1 USDT is worth $1 or 74.57 rupees as per the current dollar-rupee rate.
However, Tether (USDT) crashed on prominent Indian crypto platforms and dived to as low as ₹60. This move happened after the lower house of the Indian Parliament said that they’ll bring the crypto bill into a discussion on November 29. The crypto bill or the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 will be tabled in Parliament’s winter session.
Taking advantage of this, some traders bought Tether at a discount. Crypto asset management companies based in India said that many traders couldn’t take this advantage. This is due to the technical glitches on major crypto exchanges.
MintingM, an India-based crypto asset management company, said:
“Many investors were unable to transfer money to exchanges, those holding INR on exchanges could take the gambit.”
Although Tether (USDT) recovered to trade pretty much in line with the USD/INR exchange rate, it is still short of the price of ₹80. Tether (USDT) trades at a premium of 5% on Indian exchanges due to high demand.
Tether had suffered a similar meltdown in the starting months of the year. This was due to the same reason as the lower house bulletin cited the bill for banning cryptocurrencies.