
If you’re dabbling in crypto investing, you’ve likely come across USDT (Tether)—a stablecoin designed to mimic the value of the US Dollar. It’s widely used for trading, storing value, and protecting your portfolio from market swings. But given India’s cautious stance on crypto, one burning question remains: Can you legally buy USDT in India? The short answer is yes, but there’s more to it.
In this guide, we’ll break down the legal clarity around USDT in India, how to buy it safely, taxation rules, where to store it, and why choosing the right platform matters.
USDT, or Tether, is a stablecoin—a type of cryptocurrency that maintains a stable value by being pegged to a reserve asset, typically a fiat currency like the US Dollar. In USDT’s case, every token is intended to represent 1 USD. Here is why investors use USDT:
USDT currently ranks among the top 3 cryptocurrencies by market capitalization, trailing only Bitcoin and Ethereum, and processes billions of dollars in daily volume.
ALSO READ: What Are Stablecoins? What Are Its Different Types and Their Benefits
Yes— buying USDT in India is legal. But it’s important to understand the nuance. India does not yet have a specific regulatory framework that legalizes or prohibits cryptocurrencies like USDT. What it does have is a tax regime, guidelines for KYC, and regulatory oversight via existing laws like FEMA (Foreign Exchange Management Act). In essence:
The Reserve Bank of India (RBI) has been cautious about crypto but hasn’t banned it. The Supreme Court struck down the RBI’s banking ban in 2020, reopening access to crypto. Since then, the government has focused on regulating crypto through taxation and compliance rather than prohibition.
In India, the legality of buying USDT hinges largely on where and how you buy it. The safest and most compliant route is to use a regulated, KYC-compliant platform like Mudrex. These platforms are aligned with existing laws, including those governed by FEMA and the Income Tax Act.
If you’re ready to buy USDT but aren’t sure where to start, you’re not alone. For new investors, the buying process may seem intimidating, but with platforms like Mudrex, it’s easy. Mudrex has built an intuitive interface that caters specifically to Indian investors, ensuring full compliance with local laws and financial regulations. Here’s a detailed breakdown of how you can buy USDT legally and securely:
You can also join the Mudrex Telegram Community for updates, support, and news regarding crypto.
ALSO READ: How to Buy Tether in India?
Your transaction is considered legal in India when the following conditions are met:
Buying USDT through P2P or foreign exchanges without KYC may fall into a legal gray area, which we’ll cover later.
USDT, like all cryptocurrencies, is taxed under India’s current crypto tax regime, announced in 2022. The Income Tax Act now includes provisions for Virtual Digital Assets (VDAs), a category under which USDT falls. Here’s how it works:
Here is an example for your understanding:
Once you buy USDT, the next step is to store it securely. Here are some storage options:
Storage Type | Best For | Risk Level | Example Tools |
Exchange Wallet | Active trading | Medium | Mudrex, Binance |
Hot Wallet | Regular transfers & payments | Medium | MetaMask, Trust Wallet |
Cold Wallet | Long-term secure storage | Low | Ledger, Trezor |
Pro Tip: For large holdings or long-term savings, transfer USDT to a cold wallet to avoid online threats.
Peer-to-peer (P2P) crypto trading is not illegal, but it operates in a regulatory gray zone. Here’s what you need to know:
While platforms like Binance and WazirX offer P2P features, the safer choice is always to go through regulated platforms like Mudrex that ensure transparency, compliance, and fund security.
The bottom line? Buying USDT in India is legal, as long as you do it the right way. While India doesn’t recognize crypto as official currency, it has established a framework for its taxation and regulation. By choosing a compliant platform like Mudrex, verifying your identity, and keeping accurate records for taxation, you can confidently participate in the crypto ecosystem without breaking any laws.
As global and local crypto policies evolve, staying informed and compliant will be your biggest advantage. Whether you’re using USDT as a hedge against market volatility or as a tool for efficient trading, ensure that every step you take is aligned with India’s legal and regulatory norms.
USDT is not banned. It’s legal to buy and sell as long as you follow compliance protocols and tax guidelines.
Platforms like Mudrex allow direct purchases of USDT using Indian Rupees via UPI, bank transfers, or net banking.
Any gains from selling USDT must be reported under capital gains in your Income Tax Return.
It’s safe for short-term holding, especially on regulated platforms. For long-term storage, consider a hardware (cold) wallet.
There are no hard limits from the government, but exchanges may have internal limits for KYC-unverified users or specific funding sources.