Howard Lutnick of Cantor Fitzgerald is negotiating with Tether for a $2 billion Bitcoin lending project. This initiative aims to lend dollars to clients using Bitcoin as collateral, potentially expanding into tens of billions. Tether’s custody services for U.S. Treasuries and Lutnick’s ties to Trump’s transition team underline the significance of this partnership in the evolving financial landscape.

Howard Lutnick is seeking to solidify his connections with Tether Holdings Ltd., a significant player in the digital asset sphere. Negotiations are underway for Cantor Fitzgerald LP to obtain financial backing from Tether for a proposed multi-billion dollar lending initiative. This program aims to enable clients to secure loans in dollars, putting up Bitcoin as collateral, with initial funding projected at $2 billion, potentially expanding into tens of billions.

Tether employs Cantor’s custody services to safeguard the vast holdings of U.S. Treasuries that underpin its USDT stablecoin, generating substantial revenue for Cantor annually. Lutnick, who is closely associated with Donald Trump’s transition team, is reportedly preparing to delegate his Tether-related responsibilities as he prepares for a leadership role in the Commerce Department. One of his family members, Brandon Lutnick, is employed as a trader at Cantor and has previous experience with Tether in Switzerland.

The ongoing collaboration could position Tether as a co-investor among various financial backers in the lending project. While Cantor has made strides in recruitment for the initiative, it has yet to commence lending operations. The company continues to navigate various regulatory challenges, having faced scrutiny for alleged compliance issues. However, Lutnick’s firm has reportedly made a $600 million investment in Tether, securing approximately a 5% ownership stake that highlights their evolving relationship.

The digital asset ecosystem has garnered significant attention, particularly regarding stablecoins, which aim to maintain a stable value by being pegged to traditional currencies like the U.S. dollar. Tether Holdings Ltd. is a leader in this market, known for its stablecoin, USDT. Cantor Fitzgerald LP, a financial services company, is looking to deepen its engagement with Tether by launching a lending program that would leverage cryptocurrency as collateral. The intersection of traditional finance and cryptocurrency presents both opportunities and challenges, particularly in regulatory contexts.

In summary, Howard Lutnick’s pursuit of a partnership with Tether Holdings epitomizes the growing interconnection between traditional finance and the cryptocurrency space. With significant funds slated for a Bitcoin-backed lending program, the collaboration could substantially impact both entities. As both companies navigate regulatory landscapes, their evolving relationship marks a notable development in the digital asset market.

Original Source: fortune.com

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