Jeremy Kranz, founder and managing partner of Sentinel Global, has warned investors to be cautious with privately issued stablecoins, arguing they carry similar risks to central bank digital currencies (CBDCs) — and sometimes even more.
Kranz coined the term “central business digital currency” to describe how corporate-backed stablecoins can exercise the same surveillance, programmability, and control features often criticized in government-issued digital money.
“If JP Morgan issued a dollar stablecoin and controlled it under the Patriot Act, they could freeze your money and unbank you,” Kranz told to media.
Sentinel Global founder and managing partner Jeremy Kranz. : Sentinel Global
Investor caution urged
Kranz said investors should be “discerning” and carefully read the fine print of any stablecoin project. Even overcollateralized stablecoins—those backed by cash or short-term Treasurys—face bank-run risks if too many holders redeem at once.
Meanwhile, algorithmic or synthetic stablecoins carry exposure to market volatility, de-pegging, or derivative flash crashes, adding another layer of counterparty risk.
Kranz emphasized that technology is neutral—it can empower individuals or centralize control depending on how it’s implemented and who governs it.
$300 B stablecoin market poses both opportunity and risk
The stablecoin market cap surpassed $300 billion in October, data from DeFiLlama shows. The surge follows growing attention on stablecoin regulation, particularly after the GENIUS bill passed in the United States.
Stablecoin market cap sits at over $307 billion. : DeFiLlama
However, not all lawmakers support the move. Rep. Marjorie Taylor Greene called it a “CBDC Trojan Horse,” warning it could enable an authoritarian, cashless financial system where governments can control spending or restrict access to funds.
Kranz believes the accelerating innovation in stablecoins, tokenization, and crypto finance brings “ten black-swan-level disruptions” — offering massive potential but also systemic risks that require awareness and accountability.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.
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