Trump Commerce Pick Lutnick Said in Talks to Deepen Ties With Tether

(Reuters) -U.S. President-elect Donald Trump's pick for Commerce secretary, Howard Lutnick, is in talks to deepen his financial ties with the company operating the world's largest stablecoin, Tether, by launching a $2 billion project to lend dollars to clients against bitcoin, Bloomberg News reported on Sunday.

U.S. President-elect Donald Trump’s nominee for Commerce secretary, Howard Lutnick, is in talks to forge deeper financial ties with the company operating the world’s largest stablecoin, Tether, by launching a $2 billion project to lend dollars to clients against bitcoin, Bloomberg News reported on Sunday.

Lutnick’s financial services firm, Cantor Fitzgerald, is discussing the possibility of receiving support from Tether to help fund the project, which could eventually grow to tens of billions of dollars, the report said, citing people familiar with the matter.

“Tether Investments is looking to use part of the profits generated in the past years for different opportunities,” Tether said in an e-mailed response to Reuters.

Cantor Fitzgerald did not immediately respond to a Reuters request for comment outside business hours.

Tether uses Cantor to hold billions of dollars worth of Treasuries that support the value of its stablecoin in a relationship that helps Lutnick’s firm earn tens of millions of dollars annually, Bloomberg reported.

Stablecoins are digital tokens designed to keep a constant value, and are backed by traditional currencies such as the U.S. dollar or euro.

Earlier this week, Trump said he would nominate Lutnick to lead his trade and tariff strategy as head of the Commerce Department. Lutnick would also have “additional direct responsibility” for the U.S. Trade Representative’s office.

Lutnick has been a vocal proponent of cryptocurrency adoption.

The Commerce Department oversees a sprawling array of functions with nearly 47,000 employees, from the U.S. Census Bureau to weather forecasting, ocean navigation and investment promotion.