Cantor Fitzgerald Plans $2 Billion Bitcoin Lending Program with Tether
Cantor Fitzgerald, an American financial services firm led by Chairman and CEO Howard Lutnick, is exploring a collaboration with Tether to launch a $2 billion Bitcoin-backed lending program. The project, announced in July during a Bitcoin Conference in the United States, aims to provide US dollar loans using Bitcoin as collateral and may expand significantly over time.
A Potential Partnership to Increase Bitcoin's Role in Institutional Finance
Lutnick indicated that the initiative would start with $2 billion in lending and could increase in $2 billion increments as required. This effort seeks to integrate Bitcoin into the financing framework of global financial markets.
Recent reports indicate progress toward the potential launch, with discussions ongoing between Cantor Fitzgerald and Tether's Giancarlo Devasini regarding the lending program.
Tether acknowledged the possibility of new ventures, stating:
"Tether Investments is looking to use part of the profits generated in the past years for different opportunities."
This partnership follows Cantor Fitzgerald's acquisition of a 5% stake in Tether, valued at approximately $600 million. Additionally, Tether holds billions of dollars in US Treasury securities through Cantor, backing Tether's USDT stablecoin and generating significant revenue for Cantor Fitzgerald.
Regulatory Headwinds for Crypto Lending
The 5% stake highlights Lutnick's growing connections to the crypto sector, particularly as he prepares for a potential role in the incoming Trump administration as Commerce Secretary, which would involve oversight of trade matters. Lutnick is also co-chair of Donald Trump's transition team.
The proposed Bitcoin lending initiative faces challenges from US regulators, who have intensified scrutiny on crypto lending platforms, labeling many as illegal due to consumer protection concerns. This regulatory environment complicates the efforts of Cantor and Tether as they navigate compliance while introducing innovative financial products.
If finalized, this partnership would represent a significant Bitcoin-focused lending initiative by a traditional financial institution, merging Wall Street expertise with the influence of a notable crypto company. For Lutnick and Cantor Fitzgerald, this move reflects a strategic investment in Bitcoin as a fundamental financial asset amidst regulatory challenges.