From Stagnation to Sovereignty

Why the alignment between SoftBank, Tether, and Cantor Fitzgerald is the biggest story Wall Street is missing

For decades since the 1990s, Japan has struggled to escape the gravity of economic stagnation. In response, policymakers engineered one of the most aggressive ultra-low interest rate regimes in modern history which was intended to catalyze domestic investment and rejuvenate growth. But instead of sparking a renaissance at home, this policy gave rise to one of the most powerful engines of financial distortion: “the global carry trade.”

For context, this global carry system operates as a form of financial repression where structurally suppressed interest rates in developed economies, like Japan, push capital abroad in search of higher yields. Cheap yen flowed into U.S. Treasuries, emerging markets, and speculative tech ventures, creating the illusion of global liquidity while quietly inflating systemic risk. In this setup, Japan became less an organic growth engine and more an inorganic global financier—relying on external asset inflation while its domestic productivity atrophied and its currency weakened.

To understand SoftBank’s emergence therefore is to understand it as a natural byproduct of the system. Drawing capital from repressed monetary conditions as a financial arbitrage, it deployed funds with extreme leverage into global high-growth/high-risk sectors with a hint of desperation. While technically a publicly traded co, SoftBank functions more like a “de facto sovereign wealth fund” backed by state-aligned entities such as Saudi Arabia’s PIF and Abu Dhabi’s Mubadala with a strategic industrial role. Masayoshi Son’s quasi-nationalist undertone historically shows this isn’t just about returns—it’s about reigniting Japan (and their partners) competitive spirit in the age of exponential technology while fighting against financial repression.

Because on the other side of the global system sits the United States, enjoying what’s long been called the “exorbitant privilege.” As the issuer of the world’s reserve currency, the US can borrow at lower rates while controlling access to dollars through tools like SWIFT and sanctions. It's financial repression for everyone else—but privilege for the issuer. However, the abuse of the “exorbitant privilege” has not gone unnoticed by the international community (most severely when the US froze Russia’s central bank reserves in 2022).

Now enter Tether—the unofficial “eurodollar” machine of the crypto age. Operating outside the traditional banking system, Tether acts as a shadow central bank, exporting digital dollars to meet global demand without U.S. regulatory entanglement. Like the post-WWII eurodollar markets in London, Tether allows offshore actors to access dollars while quietly capturing the interest spread. If financial repression is the public burden, Tether is the private loophole that the international community demands.

In this context, the emerging alignment between SoftBank/Tether via Cantor Fitzgerald marks a critical geopolitical-financial inflection point. These two entities are mirror images shaped by dollar hegemony: one a beneficiary of dollar weaponization, minting synthetic dollars in regulatory gray zones, the other a byproduct of that weaponization, forced into compliant but excessive leverage to escape domestic stagnation.

As the trade war jolted Japan awake from its long slumber, this transformative partnership is now converging. If SoftBank can tap into Tether’s ability to move dollars outside censorship control with the lowest global financing cost on Earth, it could help redesign the global financial system from within, as the largest US sovereign creditor. This will not merely be capital deployment, but a total system design—with Bitcoin at the center that only Japan can do. With Tether as a partner, SoftBank may finally flip the script, as Michael Saylor might put it: the most hopeless is often the most courageous. For Japan, long caught in the inertia of external dependence, this is the rarest moment of opportunity to make its most strategic crypto play yet.

P.S. Here is a link to the Unchained Show I had the pleasure to join with the great Laura Shin: