Tech
Franklin Templeton CEO is optimistic about Blockchain technology and the trend of asset tokenization
Last Updated: May 13, 2024 6:12am EDT | 1 minute read
Franklin Templeton CEO Jenny Johnson, who oversees the $1.6 trillion asset management firm, said she remains a big fan of blockchain technology and sees exchange-traded funds (ETFs) and mutual funds investment on the blockchain during an interview with Bloomberg host David Westin.
Johnson, granddaughter of Franklin Templeton founder Rupert Harris Johnson, joined the company in 1988 and is today one of the most powerful women in finance.
In the interview, Johnson said a “significant portion” of Franklin Templeton’s assets are stored in mutual funds, about $900 billion of the $1.6 trillion in assets and $78 billion in private credit. In the years, spoke on the topic of innovation in blockchain technology.
“We were amazed at how much less expensive it was to run a system on blockchain. It’s a very efficient technology… and we think it’s going to open up a lot of new investment opportunities and honestly, eventually, I think ETFs and mutual funds will all be on the blockchain,” Johnson said.
So, how would a tokenized ETF work?
Kent Thune, research analyst for ETF.com, explains in a recent article that tokenized ETFs, also known as security token ETFs, would combine the structure of an ETF with the benefits of blockchain technology.
“A tokenized ETF would tokenize the underlying assets of the ETF. These tokenized representations would reside on a blockchain, a secure and transparent digital ledger. Investors would hold digital tokens representing ownership of the ETF, rather than traditional ETF shares,” Thune writes.
Wall Street and tokenization
There has been a strong push among Wall Street firms to step up their efforts to tokenize assets on the blockchain, as reported by Benzinga. Tokenization occurs when tangible and intangible assets are converted into digital tokens: everything from stocks and bonds to gold bullion, real estate, and digital and physical art.
In March 2023, Black rock CEO Larry Fink commented in his annual letter to shareholders that there is operational potential for some of the underlying technologies in the digital asset space that could have interesting applications. Tokenization of asset classes “offers the prospect of driving efficiency in capital markets, shortening value chains and improving costs and access for investors,” Fink said.