USDT is dollar-pegged but not actual USD. To get USD into a bank account abroad (or in your name in a US-friendly account), you have a few legitimate paths — each with constraints.
Path 1 — USDT to USD via centralised exchange
Send USDT to an exchange that supports USD withdrawal (Coinbase, Kraken, Gemini for US users; Bitstamp, Binance for some others). Trade USDT/USD on spot. Withdraw USD via wire/ACH to a USD bank account.
Constraint: you need a USD bank account that accepts crypto-exchange transfers. Most US banks do; Indian banks generally don't.
Path 2 — USD via family/business abroad
Send USDT to a family member or business partner abroad. They sell USDT for USD on their local exchange and credit your USD account (which they have access to, or wire it to your US account).
Tax implication: this is typically a transfer to a relative, taxed depending on relationship under Section 56.
Path 3 — Crypto-friendly fintech
Some platforms (Mercury, Wise — for businesses) accept stablecoin deposits and convert to USD. Mostly business-account focused; personal accounts limited.
FEMA / LRS
All paths above effectively move money out of India, so LRS limits ($250,000/year) and conservative tax treatment apply. Document carefully.
Key takeaways
- USDT → USD requires a USD-banked exchange or a partner abroad.
- Indian banks don't accept crypto-exchange USD transfers directly.
- FEMA/LRS implications apply on outbound; document carefully.
- Wise / Mercury bridge well for businesses.
