Howard Lutnick’s Appointment Boosts Tether’s Political Standing
Cantor Fitzgerald has become a 5% investor in Tether-a stake worth as much as $600 million-in one of the biggest-ever intersections between traditional finance and cryptocurrency. That news came weeks after Cantor Fitzgerald Chief Executive Officer Howard Lutnick was appointed President-elect Donald Trump’s Secretary of Commerce, a development that could help boost Tether’s standing in Washington.
The partnership positions Tether for possible political backing under Lutnick’s influence, he himself was transitioned into a high-profile government role. Lutnick, who is part of the inner team that helped vet candidates for government positions, many of which may have direct or indirect oversight over them and its operations.
A Strategic Partnership
Cantor Fitzgerald, a crucial banking partner for Tether, oversees a large chunk of stablecoin issuer’s $134 billion reserves, mostly in U.S. Treasury bills. The financial company’s decision to invest with Tether portrays a vote of confidence in stability and operations, as the cryptocurrency stablecoin is under increased scrutiny from regulators worldwide.
This deal comes at a time when Tether has become a banks’ persona non grata all over the world, making the continued support from Cantor Fitzgerald all the more important. Under Lutnick’s helm, the collaboration could be a hedge against regulatory pressures while ensuring the financial stability of them.
Regulatory and Banking Challenges
It remains under investigation by the U.S. Attorney’s Office for the Southern District of New York for alleged misuse by third parties to further illicit activities, including terrorism financing. The scrutiny highlights the tumult faced by the stablecoin issuer. Still, Lutnick’s political clout could give him an edge that might diffuse these threats.
A Broader Crypto Vision
Lutnick’s crypto ambitions go well beyond them. In a keynote speech at the Bitcoin 2024 conference, he unveiled Cantor Fitzgerald’s $2 billion Bitcoin lending program and touted the firm’s deeper push into crypto. He has also become a vocal advocate for a broader role of dollar-backed stablecoins like Tether in helping citizens of high-inflation economies like Argentina, Turkey, and Venezuela.
The Future
But as Lutnick prepares to step down as Cantor Fitzgerald CEO upon Senate confirmation, this partnership represents a pivotal moment for Tether: the unlikely alliance of a major financial institution and the leading stablecoin issuer could remake the crypto financial landscape, signaling new avenues of growth, regulation, and political collaboration.
