Cantor Fitzgerald to Strengthen Tether Ties

By Mark Hunter

1 week agoMon Nov 25 2024 08:36:13

Reading Time: 2 minutes

• Cantor Fitzgerald has initiated discussions with Tether to establish a $2 billion Bitcoin-backed lending program
• The firm has acquired a 5% stake in Tether, valued at up to $600 million
• Howard Lutnick, CEO of Cantor Fitzgerald, has been nominated as President-elect Donald Trump’s Secretary of Commerce

Financial giant Cantor Fitzgerald is collaborating with Tether to launch a $2 billion lending initiative, offering dollar loans secured by Bitcoin. The firm has also acquired a 5% stake in Tether, valued at up to $600 million, with CEO Howard Lutnick, a proponent of cryptocurrency, keen to confer some respectability on the stablecoin issuer. Lutnick has been nominated as Secretary of Commerce by President-elect Donald Trump, which will only benefit Tether’s attempts to shake its image as a fraudulent enterprise.

Tether Looking for Credibility Boost

Tether, known for its USDT stablecoin backed by reserves of U.S. Treasury securities, plays a crucial role in global crypto liquidity, and this investment positions Cantor Fitzgerald as a major player in the burgeoning stablecoin ecosystem. Analysts suggest that this move could also strengthen Tether’s position as it navigates increasing regulatory scrutiny, most notably in Europe where it is struggling to comply with Markets in Crypto-Assets Regulation regulations.

The firm has already been holding billions in U.S. Treasuries that back Tether’s stablecoin, earning substantial returns from these holdings.

Lutnick’s Role and Influence

Howard Lutnick has been nominated by President-elect Donald Trump for the position of Secretary of Commerce, a role central to shaping the U.S. economy. Known for his outspoken support of cryptocurrency, and Tether in particular, Lutnick’s potential appointment has sparked discussions about the intersection of policy and innovation in financial markets. His firm’s collaboration with Tether aligns with his broader advocacy for integrating crypto into mainstream finance.

While some critics express concerns about the political and financial implications of this alliance, supporters see it as a bold step toward modernizing commerce and investment strategies.