Cantor Fitzgerald CEO Howard Lutnick recently expressed his admiration for Tether, the stablecoin issuer, in a CNBC interview. Lutnick, describing himself as a “big fan” of Tether, disclosed that he holds the company’s treasuries, which currently amount to over $90 billion. In a departure from the trend of major Wall Street firms shying away from crypto businesses, Cantor Fitzgerald has actively managed Tether’s multibillion-dollar United States Treasury portfolio for several years.
Cantor Fitzgerald CEO says he is a fan of Tether
The partnership between Cantor and Tether reportedly began in late 2021, as revealed by anonymous sources cited in a February 10 report from The Wall Street Journal. Cantor Fitzgerald, known as one of the few brokerage firms capable of trading Treasury bonds, has defied the reluctance of major financial institutions to provide services to Tether. Wells Fargo, for instance, ceased processing Tether’s wire transfers for its Taiwanese accounts back in 2017.
Despite being the largest stablecoin by market capitalization, Tether faces criticism for its lack of transparency regarding reserves. In a recent stablecoin stability assessment by S&P Global, Tether received the second-lowest ranking out of eight U.S. dollar-pegged stablecoins. The assessment considered factors such as asset management, audits, risk appetite, primary market redeemability, secondary market payment rails, and the track record of maintaining its U.S. dollar peg.
Lutnick’s stance on Bitcoin and other cryptocurrencies
While acknowledging concerns about Tether’s long-term stability, Lutnick suggested potential benefits for countries facing currency collapse, citing Argentina as an example. Argentina’s president, Javier Milei, has expressed intentions to abolish the country’s central bank and transition to the U.S. dollar. James Check, the lead on-chain analyst at blockchain analytics firm Glassnode, envisions Tether as a potential central bank digital currency (CBDC) controlled by the United States.
Check anticipates developing countries increasingly relying on Tether for dollarization. Initially expressing a general favor for crypto, Lutnick later refined his praise to focus specifically on Bitcoin. He expressed skepticism about “other coins,” referring to them as “make-believe.” Lutnick highlighted Bitcoin’s halving cycles and lack of a centralized entity as key reasons for considering it a valuable asset. In contrast, he pointed out that Tether can be frozen upon request, and Ethereum can be influenced by individuals such as Joe Lublin.
Cantor Fitzgerald’s CEO Howard Lutnick has publicly endorsed Tether, emphasizing its significance in the crypto market. Despite Tether’s challenges with transparency and stability assessments, Lutnick sees potential benefits for countries in economic distress and underscores his preference for Bitcoin over other cryptocurrencies.