Earlier this the Wall Street Journal (WSJ) reported that Cantor Fitzgerald helps to oversee the Tether stablecoin bond portfolio. In a CNBC podcast yesterday, Cantor CEO Howard Lutnick confirmed as much.
“I hold their Treasuries, and they have a lot of Treasuries. I’m a big fan of Tethers,” he said.
Tether has flourished and reinforced its dominant position amongst stablecoins, despite its unwillingness to disclose details about its reserve assets. In January Tether had a market capitalization that was 45% larger than USDC. Now its market cap has passed the $90 billion mark, more than three and half times that of USDC.
Tether provides a quarterly audit which is far less frequent than attestations provided by its peers. And it only reports a summary whereas USDC and Paxos break down assets by the instrument.
Coindesk reported that Schwab and Fidelity also custody some of Tether’s reserves, without citing sources.
Lutnick also said he’s a big fan of crypto. “Let’s be very specific. Just Bitcoin. These other coins, they’re just not a thing. They’re kind of make-believe. Maybe Ethereum is okay.”
He attributed his bullish outlook to the coming Bitcoin halving and American ETFs. However, he acknowledged the appeal is trading. “It’s just a speculative thing. It’s kind of like Tesla stock. It’s just something to trade,” said Lutnick.
Additionally, he said people who worry about the $2 trillion U.S. deficits are attracted to Bitcoin.
He also spoke about the difficulty of censoring Bitcoin or freezing it. “If you have Tether and (the Department of) Justice calls Tether, they freeze it,” he concluded.
Meanwhile, S&P Global has started to publish stablecoin ratings, and Tether didn’t fair so well in part because of its lack of transparency. Additionally, a U.S. accounting body has made proposals for reporting on stablecoin reserves which would involve identifying every asset issuer, custodian and the jurisdictions in which they are based.
