Franklin Templeton's Jenny Johnson on Bitcoin ETFs, RWA Tokenization and Blockchain's Potential for TradFi

The president and CEO of the asset management giant said blockchains are "transformational tech" that can help drive down operational costs during a panel discussion at Consensus 2024.

AccessTimeIconMay 30, 2024 at 7:02 p.m. UTC
Updated May 30, 2024 at 7:05 p.m. UTC

AUSTIN, TX — Franklin Templeton, the $1.6 trillion asset manager based in Silicon Valley, has been at the forefront of traditional finance heavyweights pushing into the digital asset space.

"We have looked at blockchain tech [and found] this is going to be transformational and we better make sure we understand it," Jenny Johnson, president and CEO of Franklin Templeton, said during a Thursday panel discussion at Consensus 2024 in Austin.

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  • That's why the company is running about 30 validator nodes on 12 different blockchains, for example, on Ethereum (ETH), Cardano (ADA), Stellar (XLM) and Provenance, Johnson said on the panel. That's more than what the asset manager's website shows, which mentions six networks including the same four blockchains plus Polkadot (DOT) and Solana (SOL).

    RWA tokenization

    A key allure of blockchain technology, she explained, is the efficiency to record and reconcile transactions and its potential for cost savings.

    "Franklin [Templeton] today has a huge number of people, a couple hundred, who just reconcile [data] between systems, then we have to reconcile with our counterparty and another firm," Johnson said.

    Blockchains offer a single "source of truth" and record timing of transactions better than conventional processes, she said, which could help cut costs and decrease administrative workload.

    "We're in a business where we're constantly being pressured to drive down the costs of the delivery of what we do," she added.

    One example benefitting from blockchain is tokenization, making real-world assets such as funds and bonds available on digital asset rails. Franklin Templeton was a pioneer, she said, launching the first money market fund available on-chain using the Stellar network in 2021, years before rivals like BlackRock entered the space.

    Bitcoin ETFs

    Franklin Templeton was one of the 11 issuers approved to list spot-based bitcoin exchange-traded funds in the U.S. in January, and is also among those waiting for approval to launch a similar vehicle for the second-largest cryptocurrency ether.

    Johnson said that many people are attracted to bitcoin (BTC) as an asset outside of the banking system that's resistant to government seizure, but ETFs offer a well-understood vehicle to get exposure.

    "For me, it's a vehicle of choice," Johnson said. "An ETF is a regulated entity, which makes a lot of people more comfortable who wouldn't have transacted in this space otherwise."

    Edited by Stephen Alpher.

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    Krisztian  Sandor

    Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.