Financial services giant Cantor Fitzgerald has reportedly acquired a 5% stake in stablecoin issuer Tether over the past year, a move that could carry significant political and financial implications.
According to a Wall Street Journal (WSJ) report on November 24, this stake was valued at up to $600 million at the time of the agreement.
Why is the Move Important?
This development gains further significance following the appointment of Cantor Fitzgerald CEO Howard Lutnick as United States President-elect Donald Trump’s Secretary of Commerce on November 19.
Lutnick, a close adviser in Trump’s transition team, has been actively involved in selecting candidates for key government positions, some of which could directly oversee companies like Tether.
Political Clout and Tether’s Position
Giancarlo Devasini, suspected to be Tether’s largest shareholder, reportedly hinted at the potential benefits of Lutnick’s new role. According to WSJ, Devasini expressed optimism about Lutnick using his political influence to mitigate threats facing Tether.
The stablecoin issuer has been under scrutiny, with investigations by the U.S. Attorney’s Office for the Southern District of New York into alleged misuse of Tether for illicit activities, including terrorism financing.
As Lutnick prepares to step down as Cantor Fitzgerald’s CEO upon Senate confirmation, questions arise about how his new position might impact Tether’s standing within regulatory and political spheres.
Strengthening Tether’s Banking Relationships
Cantor Fitzgerald’s involvement has already positioned the firm as one of Tether’s most crucial banking partners, especially as Tether faces banking challenges globally. This partnership comes at a time when stablecoins like Tether have seen widespread adoption in cryptocurrency trading, decentralized finance, and cross-border transactions.
In addition to its existing collaborations, Cantor Fitzgerald is reportedly exploring a Bitcoin-backed lending program in partnership with Tether.
According to Bloomberg, the initiative would enable clients to borrow dollars using Bitcoin as collateral. The program could initially roll out with $2 billion in lending capacity, with potential for expansion as cryptocurrency adoption increases.
Tether’s Continued Expansion
Despite the regulatory spotlight, Tether continues to grow its influence in the crypto market. Since November 8, Tether has minted 13 billion USDT tokens, highlighting the stablecoin’s dominant role in the ecosystem, Lookonchain reported.
With a market capitalization exceeding $80 billion, Tether remains the most widely used stablecoin globally, facilitating liquidity and acting as a bridge for traders in volatile markets.
Implications of the Partnership
Cantor Fitzgerald’s investment in Tether signals a convergence of traditional finance and cryptocurrency. If Lutnick leverages his political connections to support Tether, it could mark a significant shift in how stablecoins are viewed by regulators and policymakers.
However, this development also raises concerns about potential conflicts of interest and the broader implications for financial oversight.
As Tether expands its services and strengthens partnerships, its role in the global financial landscape continues to evolve. Whether this newfound alliance with Cantor Fitzgerald and its leadership’s political influence will benefit Tether remains to be seen.