Stablecoins are ‘fundamental’ for the US economy — Cantor Fitzgerald CEO

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During the Chainalysis Links conference held in New York, Cantor Fitzgerald CEO Howard Lutnick claimed that he supports “properly backed stablecoins,” citing Tether’s USDT and Circle’s USDC as major movers in the market.

Lutnick claims that stablecoins represent a beneficial and fundamental instrument for the US economy, noting that the tokenization of financial assets will likely increase over the next decade as stablecoin usage expands globally.

“Dollar hegemony is fundamental to the United State of America. It matters to us, to our economy,” Lutnick said in the conference. “That’s why I’m a fan of properly backed stablecoins. I’m a fan of Tether. I’m a fan of Circle.”

According to Lutnick, stablecoins represent a “non-systemic risk to the world,” one that drives and creates demand for the US Treasuries. Lutnick went on to describe stablecoins as an “evolution” in the context of financial and economic applications.

“It drives demand for US Treasuries and it is fundamental for the US economy,” Lutnick claimed.

The exec’s claims are grounded on Cantor Fitzgerald’s status as the custodian for Tether‘s USDT stablecoin, which itself is fundamental to much of the crypto market. USDT has a market capitalization of $107 billion over an average daily volume of $55 billion. Circle‘s USDC, which Lutnick also mentioned, is the second-largest stablecoin issued, with a market capitalization of $32 billion.

Despite these supportive pronouncements on stablecoins, Lutnick also expressed opposition to central bank digital currencies (CBDCs), citing concerns about how such financial products could be perceived in terms of geopolitical and economic boundaries. On this matter, Lutnick said:

“My fear is that central banks would like to issue a central bank digital currency, that makes sense right? But the problem is what will China think. [They] will define it as the American spy wallet.”

Looking ahead, Lutnick predicted an increase in the tokenization of real-world assets (RWAs) such as bonds over the next 10 years, as proper blockchains that are fast and cheap become more widely available.

“I think when proper blockchains, I mean blockchains that are fast and cheap, are available, I think you will see over the next 10 years, fundamental tokenization of financial assets,” Lutnick claimed.

Estimated to reach a market of $5 trillion by 2030, tokenization has been discussed as one of the few viable use cases for blockchain technology. Notably, financial firms such as BlackRock, Brevan Howard, and Kohlberg Kravis Roberts have launched their respective initiatives for tokenizing funds, in an effort to capture this emerging market.

As the chief exec of a major financial institution, Lutnick’s support for stablecoins as a fundamental driver for the US economy, as well as his prediction of increased tokenization in the coming decade adds weight to the ongoing discussions surrounding the future of digital assets and their integration into traditional financial systems.

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