Franklin Templeton CEO Jenny Johnson Discusses the Role of Blockchain in the Firm’s Long-Term Strategy
Johnson highlights the potential of blockchain technology in democratizing markets and enhancing efficiency.
At the Fortune Global Forum in Abu Dhabi, Jenny Johnson, the president and CEO of Franklin Templeton, shared insights into the firm’s exploration of blockchain technology and its long-term strategy. Franklin Templeton, a global investment management firm with over $1.3 trillion in assets under management, has been at the forefront of adopting blockchain technology. Johnson discusses the potential of blockchain in democratizing markets and streamlining transactions, as well as the firm’s foray into cryptocurrency investments.
Blockchain’s Role in Franklin Templeton’s Long-Term Strategy:
Johnson emphasizes the distinction between Bitcoin and blockchain technology, stating that while there is a demand for Bitcoin and the firm has filed an application for a Bitcoin ETF, she is more excited about the potential of blockchain technology. She believes blockchain will enable access to private markets and democratize them by reducing frictional costs associated with transactions. This will facilitate the securitization and fractionalization of ownership of traditionally hard-to-process assets, unlocking nontraditional and non-correlated asset classes for clients. Johnson also highlights the efficiency gains that blockchain can bring to existing products, such as ETFs, by enabling real-time pricing and atomic settlement.
The Potential Approval of a Bitcoin Spot ETF:
When asked about the potential approval of a Bitcoin spot ETF, Johnson defers to the regulators, stating that their role is to protect consumers. While she acknowledges the demand for Bitcoin and the convenience of a spot ETF, she cautions that Bitcoin’s investment thesis can be challenging and advises responsible allocation.
Johnson’s Discovery of Blockchain and Crypto:
Having previously led the technology division at Franklin Templeton, Johnson has always kept an eye on disruptive technologies. She initially expected blockchain to take longer to mature but has been impressed by the rapid development and innovation in the space. Johnson personally invests in cryptocurrencies, including Ethereum and Bitcoin, and keeps a diversified portfolio.
Future Blockchain and Crypto-Related Products:
While Johnson acknowledges the potential for wealth managers to launch blockchain- or crypto-related products such as crypto indexes or futures ETFs, she notes that retirement plans typically have fiduciaries making investment decisions. Franklin Templeton’s role is to make these products available to clients based on their preferences.
Tokenization and the Success of Franklin Templeton’s Money-Market Fund:
Johnson highlights the success of Franklin Templeton’s tokenized U.S. money-market fund, which has seen significant inflows. She sees technology, including blockchain, as an opportunity to deliver the firm’s expertise in different investment vehicles. While there are currently no plans to tokenize other funds, Johnson believes that as the technology matures, more opportunities will arise.
NFTs and Johnson’s Perspective:
Regarding non-fungible tokens (NFTs), Johnson acknowledges that there are both successful and unsuccessful investments in the space. She personally focuses on investments that have a strong financial foundation. Johnson recognizes the potential of NFTs in areas such as art, where market prices can be determined by the preferences of buyers.
Conclusion:
Franklin Templeton’s CEO, Jenny Johnson, believes that blockchain technology holds immense potential in democratizing markets, streamlining transactions, and unlocking new asset classes. While the firm has filed an application for a Bitcoin ETF, Johnson emphasizes the broader benefits of blockchain beyond cryptocurrencies. With a focus on delivering expertise in various investment vehicles, Franklin Templeton remains committed to exploring the opportunities presented by blockchain technology.