Jenny Johnson, President and CEO, Franklin Templeton has long been a blockchain fan. “Eventually I think ETFs and mutual funds are all going to be on blockchain,” she told Bloomberg TV last week. The asset manager issued a money market fund on blockchain, which was the largest blockchain-based treasury fund until last week. The Franklin Onchain US Government Money fund has a market capitalization of $367 million and more than four hundred token holders. It was recently pushed into second spot by BlackRock’s institutionally targeted BUIDL fund.
Ms Johnson spoke about the benefits of blockchain. She discussed how the SEC required the asset manager to run the blockchain-built record of shareholders alongside their existing in-house system for six to eight months. “We were astonished about how less costly it was to run it on blockchain. It’s a very efficient technology,” she said.
While this sort of benefit sounds like it would appeal mainly to accountants, it impacts most businesses, especially anything involving transactions. She went on to explain how it reduces the need for counterparties to reconcile because everybody shares the same single source of data.
“So that drives out a lot of costs. When you drive out the friction in transactions, you can start to invest in new areas,” said Ms Johnson.
She’s also interested in new opportunities, such as the possibility of investing in a music track license to earn a tiny amount of money every time a track is played.
Digital asset risks?
At the same time, the Bloomberg interviewer asked about the risks with digital assets and whether retail investors understand what they’re investing in.
“There’s a lot of areas that are risky which is why you want good advice if you are investing in the digital asset or the crypto world,” said Ms Johnson. “But there’s also really interesting investment opportunities in that space. But it is a challenge, and you can definitely step on some landmines.”
That’s one of the reasons why Franklin Templeton runs a digital asset course for financial advisors. While other asset managers are starting to get interested in blockchain, to our knowledge only Franklin Templeton runs staking nodes on multiple blockchains – Provenance, Cardano, Stellar, Ethereum, Polkadot and Solana.
