The post Sentinel Global founder warns stablecoins mirror CBDC risks appeared on BitcoinEthereumNews.com.

Jeremy Kranz, founder and managing partner of the venture capital firm Sentinel Global, has urged investors to exercise caution when dealing with privately issued stablecoins. According to Kranz, these assets carry all the risks associated with central bank digital currencies (CBDCs), as well as additional, unique vulnerabilities of their own. Kranz refers to privately issued stablecoins as a “central business digital currency.” Based on his explanation, they include similar monitoring features, backdoors, programmability, and controls in CBDCs. Jeremy Kranz warns of risks associated with stablecoins  When asked to elaborate, Kranz noted that central business digital currencies and stablecoins are essentially alike. To illustrate this, the founder of Sentinel Global provided an example, explaining that if JP Morgan developed a dollar-pegged stablecoin and managed it under laws such as the Patriot Act or any future regulations, they could decide to freeze one’s funds or stop them from utilizing banking services. Kranz also mentioned that stablecoin issuers who provide more collateral than necessary and acquire their blockchain tokens using cash and short-term government securities could encounter “bank runs” if many holders attempt to cash in their tokens simultaneously. Additionally, he observed that algorithmic and synthetic stablecoins rely on software or complex transactions to maintain their value in relation to the dollar. Based on his explanation, this move introduces risks, such as increasing the likelihood of losing that connection amid situations like market volatility or sudden declines in crypto derivative markets. Kranz’s remarks followed his perspective that technology is a neutral tool that can either assist in creating an enhanced financial future for individuals or be misused.  According to him, the outcomes depend on individual investors taking the time to read the details, evaluating the risks, and making a prudent choice regarding their financial products.  Considering the effects the swift development of stablecoins, crypto, and…

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Filed under: News - @ October 19, 2025 6:19 am