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- Cantor Fitzgerald is confirmed as custodian of Tether’s reserves, strengthening confidence in the stablecoin in the financial market.
- Tether, with a market capitalization exceeding $90 billion, chooses Cantor for his experience in the Treasury market.
Cantor Fitzgerald, a prominent Wall Street firm, has confirmed its role as custodian of the reserves of Tether, the popular stablecoin. This news, initially revealed by the Wall Street Journal and confirmed by Cantor CEO Howard Lutnick on a CNBC podcast, represents a significant step forward in the management and transparency of Tether.
Tether: Leader among Stablecoins with Solid Reserves
Despite its reluctance to disclose details about its reserve assets, Tether has thrived and strengthened its dominant position among stablecoins. With a market capitalization exceeding $90 billion, Tether has significantly distanced itself from competitors such as USDC .
The stablecoin offers quarterly audits, less frequent than the attestations provided by its peers, and reports only a summary, unlike USDC and Paxos which detail their assets by instrument.
Tether Custody: An Institutional Support Network
In addition to Cantor Fitzgerald, Schwab and Fidelity also reportedly custody some of Tether’s holdings, according to Coindesk. This backing from well-known firms underscores the cryptocurrency’s growing integration into the traditional financial system.
Lutnick’s View on Cryptocurrencies
Lutnick expressed his enthusiasm for crypto, focusing specifically on Bitcoin. He attributes his bullish outlook to Bitcoin upcoming halving and U.S. ETFs, although he acknowledges that its appeal lies in speculation, comparing it to stocks such as Tesla. In addition, he noted that people concerned about the $2 trillion U.S. deficit are attracted to Bitcoin.
Challenges and Scrutiny in Tether Management
Despite its importance in the crypto ecosystem, Tether has faced scrutiny and paid fines for its management and statements about the assets backing its stablecoin. It has attempted to dispel doubts about its holdings through reports from accounting firms. The company began moving its reserves to Cantor Fitzgerald in late 2021, around the time it reached an agreement with a regulator.
Tether’s Stability in the Crypto Ecosystem
The stability of Tether, where each coin is always assumed to be worth $1, is a critical piece of the cryptocurrency ecosystem. It depends on investors’ faith in the assets backing Tether, making it similar to a traditional financial institution such as a bank or money market fund.
Cantor Fitzgerald: A Strategic Partner for Tether
By hiring Cantor Fitzgerald, Tether gains a firm deeply rooted in the Treasury market. Cantor is one of 25 primary dealers in the U.S. Treasury market, which allows them to trade directly with the Federal Reserve Bank of New York and underwrite sales of U.S. government debt.
A Step Toward Transparency and Trust in Tether
Tether’s partnership with Cantor Fitzgerald is a strategic move that could increase confidence in the stablecoin, given Cantor’s reputation and experience in the financial markets.
This development not only strengthens Tether’s position in the cryptocurrency market, but also signals a step towards greater transparency and stability in the sector.
With the growing acceptance of cryptocurrencies in the traditional financial arena, the effective and transparent management of stablecoin reserves such as Tether is becoming increasingly crucial.
