Negotiations are underway for the financing scheme between the stablecoin issuer and the American financial services company. The project may potentially cost tens of billions of dollars; however, this has not been formally acknowledged.

According to Bloomberg, President-elect Donald Trump's choice for Commerce Secretary, Howard Lutnick, the chairman and CEO of Cantor Fitzgerald, is apparently in talks with Tether to start a $2 billion initiative that would use Bitcoin as collateral to lend US dollars to customers. Although there has been no formal confirmation, it is expected that the initiative would eventually grow to tens of billions.

While neither confirming nor rejecting the feasibility of the Bitcoin loan scheme, Tether Investments said in an email statement to Reuters that it is seeking to use a portion of the revenues made in previous years for other opportunities.

According to a different Wall Street Journal article, Cantor Fitzgerald paid $600 million for a 5% ownership position in Tether within the previous 12 months.

Cantor and Tether are already working together on business endeavors in addition to the investment. According to reports, Tether owns US Treasuries valued at billions of dollars with Cantor, which supports USDT and brings in tens of millions of dollars for the financial services company each year.

The Trump administration is getting closer to the cryptocurrency sector thanks to Lutnick's affiliation with Tether. Trump has already declared his plan to choose Lutnick, a well-known person in the cryptocurrency space, to lead the Commerce Department and have more direct authority over the office of the U.S. Trade Representative. In addition, Lutnick co-chairs Trump's transition team.

Tether's USD-pegged stablecoin, USDT, is well-known and now the third-largest cryptocurrency with a market value of about $132.7 billion. Nonetheless, the business has been embroiled in a continuous dispute, which has included claims that it does not have enough reserves to support its stablecoins.

Tether has settled with US authorities for dubious business operations connected to Bitfinex, its sibling firm. The US government is now looking into Tether for possible violations of anti-money laundering laws and penalties, which the business has denied.