Financial services firm Cantor Fitzgerald, which serves as Tether’s banking partner, is looking to work with the stablecoin issuer on a program that will allow clients to borrow dollars against Bitcoin as collateral, Bloomberg reported on Sunday.
The firm is expected to grow to tens or even hundreds of billions in the future. Cantor has been recruiting for this program which is yet to officially launch. Bloomberg reported anonymous sources that if Tether collaborates, it would be among several financial contributors.
Cantor Fitzgerald has already established strong business relationships with Tether. Its custody business earns fees of tens of millions of dollars per year for holding the billions of dollars worth of U.S. treasury bills that back the world’s largest stablecoin Tether (USDT). Cantor Fitzgerald continues to support Tether despite several banks refusing to do so.
The Wall Street Journal reported that Cantor-Fitzgerald agreed to purchase a 5% share in Tether in the last year for approximately $600 million.
Earlier this week, President-elect Donald Trump nominated Cantor Fitzgerald CEO Howard Lutnick, who also serves as one of Trump’s transition advisers, to be the next Commerce Secretary. Lutnick, who is also one of Trump’s transition advisers, will resign from his position as CEO at Cantor Fitzgerald after he receives senate approval.
With Lutnick joining Trump’s administration next year, Tether can be expected to receive significant political support. Giancarlo devasini, the man suspected to be the largest Tether investor, told The Wall Street Journal that Lutnick would use his political influence in order to neutralize any threats against Tether.
The WSJ reports that Lutnick has a role in Trump’s transition team and can influence who is selected for top government positions, such as those who will supervise Tether.
Tether is often the subject of controversy. Some question whether Tether holds enough reserves to back USDT 1:1 with U.S. Dollars. Lutnick himself has repeatedly endorsed Tether. Lutnick confirmed in January of this year that Tether has enough reserves to support its stablecoin.
WSJ also reported last month that Tether is under investigation by the U.S. government for possible violations of anti-money laundering and sanctions rules. Tether has, however, denied the claims.
Lutnick is known as a proponent of Bitcoin, and other digital assets. Lutnick stated in September that regulators should view Bitcoin as a commodity like oil or gold. He also stated that regulators do not have a good understanding of digital assets or how to regulate these.
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