Tether in Talks to Support Cantor Fitzgerald’s Planned Bitcoin Lending Program: WSJ

The unlaunched lending initiative will start with $2 billion in funds, which could eventually grow to tens of billions of dollars.

By Callan Quinn|Edited by Parikshit Mishra

Nov 25, 2024, 8:22 a.m.

What to know:

Tether may take part in Cantor’s multi-billion dollar bitcoin financing program.
The latter already owns a 5% stake in Tether and custodies its U.S. Treasuries.

As a seasoned crypto investor with over a decade of experience in this volatile yet exciting market, I find myself intrigued by the latest development between Tether and Cantor Fitzgerald. Having weathered numerous market crashes, regulatory changes, and scams, I’ve learned to keep my eyes open for opportunities that might shape the future of this industry.

As a crypto investor, I’ve recently learned that I might soon have the opportunity to leverage my Bitcoin holdings for loans through my broker, Cantor Fitzgerald. According to reports by The Wall Street Journal, the chairman of this esteemed trading firm, Howard Lutnick, is in talks with Tether’s Giancarlo Devasini regarding a multi-billion dollar program that enables clients like myself to borrow funds using Bitcoin as collateral. This potential development could significantly expand investment possibilities within the crypto sphere.

Initiated in July, this lending program is set to kick off with an initial investment of $2 billion that may potentially expand to multiple billions. The prospect of Tether’s involvement in the project underscores a strengthening bond between the stablecoin provider and the trading company.

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Since 2021, Cantor, who oversees Tether’s U.S. Treasuries, has additionally purchased a 5% share in Tether, the company behind the USDT stablecoin, valued at approximately $600 million, as stated in the same source.

Tether runs the global standard for stablecoins. This digital currency is pegged to the U.S. dollar and, as per CoinMarketCap, it has a total value of approximately $132.76 billion in circulation.

However, the token has faced criticism due to its alleged misuse by unlawful entities, such as con artists, money launderers, and individuals attempting to dodge sanctions. Recently, it was reported in The Wall Street Journal that Tether is under investigation in the U.S. for potential breaches of sanctions regulations and anti-money laundering laws.

Tether labeled the report as “reckless” and countered claims that their critics were ignoring Tether’s past collaborations with law enforcement and their initiatives aimed at preventing misuse.

During the Biden presidency, a number of cryptocurrency companies encountered increased regulation. However, it’s suggested that the approach taken by Trump’s administration may change, as both the President-elect and his family have been involved in various cryptocurrency initiatives, with the latest being World Liberty Financial.

Inside Trump’s inner circle are several advocates for cryptocurrency, with Lutnick among them. He currently holds a significant position within Trump’s team, serving as co-chair of the transition team. Last week, he was selected by Trump to head the U.S. Department of Commerce, a role that would put him in a position to shape the U.S.’s crypto environment.

As a researcher reporting on recent developments, I share that last week, Lutnick expressed his intention to relinquish his roles at Cantor, BGC, and Newmark if his current position is affirmed. In simpler terms, he has stated that if things remain as they are, he will resign from these three organizations.

Callan Quinn

Callan Quinn serves as a news journalist for CoinDesk, based in Hong Kong. Prior to this role, she reported on the crypto sector for The Block and DL News, focusing on topics like crypto fraud in Asia, regulatory issues, web3 trends, and experimenting with innovative projects such as China’s CBDC. In her career, Callan has worked as a reporter across the U.K., China, Georgia, and Somaliland. She also owns over $1,000 worth of ETH.

2024-11-25 11:31

Tether in Talks to Support Cantor Fitzgerald’s Planned Bitcoin Lending Program: WSJ

The unlaunched lending initiative will start with $2 billion in funds, which could eventually grow to tens of billions of dollars.

What to know:

Callan Quinn

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