Cantor and Tether Plan Bitcoin Lending Program

Wall Street giant Cantor Fitzgerald is reportedly collaborating with Tether to develop a multibillion-dollar Bitcoin-backed lending program, signaling deeper ties between traditional finance and crypto.

According to a Bloomberg report, the program would allow clients to borrow U.S. dollars using Bitcoin as collateral. It is expected to launch with an initial $2 billion allotment, with potential for expansion as cryptocurrency adoption grows.

Wall Street’s Growing Interest in Crypto

The proposed initiative reflects the increasing integration of crypto into traditional financial systems, especially as the industry anticipates regulatory changes under President-elect Donald Trump.

The program is still in its early stages, with Cantor recruiting staff to spearhead the project. It will reportedly involve multiple financial contributors alongside Tether, the leading stablecoin issuer.

Lutnick’s New Role and Transition

Cantor Fitzgerald CEO Howard Lutnick, recently nominated as Commerce Secretary in Trump’s administration, is preparing to divest his interests in the firm to comply with ethics regulations.

In a statement, Lutnick emphasized his intention to step down from roles at Cantor, BGC, and Newmark pending Senate confirmation.

As Lutnick transitions, Cantor’s relationship with Tether will be managed by other executives, with Brandon Lutnick, his son, cited as a possible candidate. Brandon previously interned at Tether’s Swiss operations, where he worked with Tether Gold reserves.

Cantor and Tether’s Existing Ties

Cantor Fitzgerald already has significant involvement with Tether:

• It manages $132 billion of Tether’s assets through its custody business.
• Cantor reportedly acquired a 5% stake in Tether worth $600 million, according to a Wall Street Journal report.

Lutnick has publicly vouched for Tether’s reserve transparency. At a Bitcoin conference in July, he recounted his initial meeting with Tether CFO Giancarlo Devasini, stating:

“I said, ‘Show me the money,’ […] And we found every penny.”

Regulatory Challenges Ahead

Tether has faced skepticism over its reserves and scrutiny over potential links to illicit activity:

• A 2021 settlement with the New York Attorney General’s office required Tether to pay $18.5 million and improve transparency.
• A U.N. report this year identified Tether’s USDT as a “preferred choice” for money launderers, though Tether has refuted such claims.

The company’s offshore structure, spanning jurisdictions like Hong Kong and the British Virgin Islands, has made it a target for U.S. lawmakers.

In April, bipartisan senators introduced a framework for stablecoin regulation, seeking to:

• Ban offshore stablecoins pegged to the U.S. dollar.
• Promote domestic oversight of stablecoin issuers.

This proposed legislation could significantly impact Tether’s operations if enacted.

Implications for Bitcoin Lending

The Bitcoin-backed lending program positions Cantor and Tether at the forefront of crypto-financial innovation. If successful, it could:

• Attract institutional clients seeking liquidity without selling their Bitcoin.
• Strengthen ties between Wall Street and crypto firms.
• Spur regulatory discussions on the integration of digital assets in traditional finance.

With Cantor’s expertise in bond trading and Tether’s dominance in stablecoins, the collaboration could mark a significant step in the evolution of decentralized finance.