In an exclusive interview, Jenny Johnson, CEO of Franklin Templeton, shares insights on the firm’s exploration of blockchain technology and its plans for the future.
At the Fortune Global Forum in Abu Dhabi, Jenny Johnson, the president and CEO of Franklin Templeton, sat down for an interview to discuss the firm’s foray into blockchain technology and its potential impact on the financial industry. As one of the top financial firms, Franklin Templeton has been at the forefront of exploring blockchain’s applications, launching the first U.S.-registered mutual fund to use a public blockchain for transactions and filing an application for a Bitcoin ETF. Johnson delves into the role blockchain will play in the firm’s long-term strategy and how it will democratize markets.
Blockchain’s Role in Franklin Templeton’s Long-Term Strategy:
Johnson emphasizes the importance of differentiating between Bitcoin and blockchain. While Bitcoin has its own use case and demand, Johnson sees blockchain technology as a game-changer for the financial industry. Blockchain enables access to private markets and the democratization of ownership by reducing transaction costs. It unlocks nontraditional asset classes and makes existing products more efficient. Johnson highlights Franklin Templeton’s early ventures in the space, including a tokenized money-market fund and participation as a node validator.
The Outlook for a Bitcoin Spot ETF:
When asked about the approval timeline for a Bitcoin spot ETF, Johnson defers to the regulators, noting that their priority is consumer protection. While she acknowledges the demand for Bitcoin, Johnson also recognizes the challenges associated with the asset’s volatility and lack of investment thesis. Nevertheless, she believes a spot ETF would provide a more convenient and narrow bid-ask spread for investors interested in Bitcoin.
Johnson’s Personal Experience with Blockchain and Crypto:
As a former head of Franklin Templeton’s technology division, Johnson has always been attuned to emerging technological trends. She initially believed blockchain would take longer to mature but has been impressed by its rapid development and the innovation happening on various platforms. Johnson personally invests in cryptocurrencies such as Ethereum, Bitcoin, SushiSwap, and Uniswap.
Future Plans for Blockchain and Crypto Products:
While Johnson acknowledges the potential for other wealth managers to launch blockchain- or crypto-related products, she notes that retirement plans, in particular, have fiduciaries who make investment decisions. Franklin Templeton’s role is to make products available to clients, and the firm remains open to exploring new opportunities as the technology matures.
Tokenization and NFTs:
Johnson sees tokenization as an exciting opportunity to deliver Franklin Templeton’s expertise in different vehicles. The firm has already ventured into the world of non-fungible tokens (NFTs) by issuing them to attendees of its Innovation Forum. Johnson believes there are opportunities for NFTs, particularly in the art space, where two people’s love for a piece can determine its market price. However, she emphasizes the need for investments anchored in financial returns for better chances of success.
Conclusion:
Franklin Templeton’s CEO, Jenny Johnson, is optimistic about the potential of blockchain technology to revolutionize the financial industry. She highlights the benefits of blockchain, such as access to private markets, democratization of ownership, and increased efficiency. While the approval of a Bitcoin spot ETF remains uncertain, Johnson believes it would be a more convenient way for investors to access Bitcoin. As the technology continues to mature, Franklin Templeton remains open to exploring new blockchain and crypto-related products, while also recognizing the potential of NFTs in certain areas. Johnson’s insights offer a glimpse into the future of finance and the transformative power of blockchain.
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