Wall Street giant Cantor Fitzgerald has made a bold move into cryptocurrency by acquiring a 5% stake in Tether's operations platform, the company behind the USDT stablecoin, in a deal valued at up to $600 million. The investment marks one of the largest commitments by a traditional financial institution to the crypto sector.
The deal positions Cantor Fitzgerald as a major player in the digital asset space, with the firm also announcing plans to launch a $2 billion Bitcoin-backed lending program. Under this initiative, Bitcoin holders will be able to use their cryptocurrency as collateral for dollar loans.
Howard Lutnick, CEO of Cantor Fitzgerald, revealed these developments at the Bitcoin 2024 conference. The firm already maintains strong ties with Tether by holding a substantial portion of its $134 billion reserves in U.S. Treasury bills.
The investment comes at a time when Tether faces regulatory challenges both in the United States and Europe. In the U.S., the stablecoin issuer is under investigation by the Southern District of New York for potential involvement in illicit activities. Meanwhile, in Europe, Tether is working to align with Markets in Crypto-Assets Regulation requirements.
Lutnick has publicly supported Tether's operations, particularly highlighting its value in countries experiencing high inflation, such as Argentina, Turkey, and Venezuela. While the 5% stake represents a relatively small portion of Cantor Fitzgerald's $3.5 billion in managed assets, the strategic partnership bridges traditional finance with the cryptocurrency sector.
The collaboration strengthens Tether's institutional backing while providing Cantor Fitzgerald with a strategic position in the expanding digital asset market. The Bitcoin lending program is expected to launch in the coming months, demonstrating the firm's commitment to integrating cryptocurrency services into its business model.