Jenny Johnson, President and CEO of Franklin Templeton, a financial titan overseeing $1.6 trillion in assets, recently highlighted the significant potential of blockchain technology in asset management.
Speaking at the 27th Annual Milken Institute Global Conference, Johnson expressed her enthusiasm for blockchain, particularly its ability to tokenize real-world assets.
Franklin Templeton Embraces Blockchain Innovation
In a conversation with Bloomberg, Johnson revealed Franklin Templeton's innovative approach to utilizing blockchain. They conducted an experiment, processing account records using both traditional and blockchain methods over a six to eight month period.
"The cost savings of running it on the blockchain were astonishing," Johnson said. "It's a very effective technology, and we believe it will open up a lot of new investment opportunities. Ultimately, I see exchange-traded funds (ETFs) and mutual funds transitioning to blockchain."
The CEO also addressed the challenges of data reconciliation across various systems in financial services, a process known for being expensive and time-consuming. Blockchain offers a single source of truth for transactions, significantly reducing costs and improving efficiency. This reduction in friction paves the way for new investment opportunities.
Johnson further illustrated the broader potential of blockchain by referencing pop star Rihanna's issuance of non-fungible tokens (NFTs) for song royalties.
"When Spotify plays a Rihanna song and you own that token," Johnson explained, "the smart contract can be triggered. The built-in payment mechanism on the blockchain can then distribute your fractional ownership shares."
Franklin Templeton Pioneering Blockchain Integration
Franklin Templeton launched the Franklin OnChain US Government Money Fund (FOBXX) in 2021, a groundbreaking initiative as the first US-registered fund to utilize public blockchain for transaction processing and share ownership documentation.
"I'm a huge advocate for blockchain technology," Johnson declared. "We had the first SEC-approved money market fund, and the SEC had us run the shareholder servicing system on blockchain."
At the core of this innovation lies the BENJI token. Operating on the Stellar (XLM) and Polygon (MATIC) blockchains, these tokens represent unique shares of the FOBXX fund. They include assets like government securities, cash, and repurchase agreements, offering a stable yield attractive to investors seeking dependable returns.
Recent data from rwa.xyz shows the BENJI token boasting a market capitalization of $367 million, ranking it second only to BlackRock's USD Institutional Digital Liquidity Fund (BUIDL).
Continuing their commitment to blockchain, Franklin Templeton launched a Bitcoin ETF in January, achieving modest net flows of $351 million to date. Furthermore, on February 13, they sought SEC approval for a spot Ethereum ETF, demonstrating their commitment to integrating blockchain further into their offerings.
Read more: Latest Bitcoin Price Prediction; Latest Ethereum Price Prediction
