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This is why Franklin Templeton bets on Blockchain technology
Jenny Johnson, President and CEO of Franklin Templeton, oversees a financial giant with assets of $1.6 trillion. Recently, you highlighted the significant benefits of blockchain technology in wealth management.
Speaking at the Milken Institute’s 27th annual global conference in California, Johnson expressed his enthusiasm for the potential of blockchain, particularly in the tokenization of real-world assets.
Jenny Johnson believes mutual funds and ETFs will come on-chain soon
During her conversation with Bloomberg, Johnson highlighted Franklin Templeton’s innovative approach to using blockchain technology. He detailed an experiment in which the company processed account records using traditional and blockchain methods over a period of six to eight months.
“We were amazed at how much cheaper it was to run it on the blockchain. It is a very effective technology and we believe it will open up many new investment opportunities. Ultimately, I think exchange traded funds (ETFs) and mutual funds will all be on the blockchain,” Johnson said.
The CEO also discussed financial services challenges related to reconciling data between systems. This process is often expensive and time consuming.
Blockchain provides a single source of truth for transactions, dramatically reducing costs and improving efficiency. This reduction in friction actually opens the way to new investment opportunities.
Johnson also illustrated the broader potential of blockchain with a reference to pop superstar Rihanna, who issued it non-fungible tokens (NFTs) for the royalties of his songs.
“So when Spotify plays a Rihanna song and you own that token, the smart contract can kick in. And the payment mechanism built into the blockchain can give you your fractions,” Johnson said.
To know more: Where to buy tokenized or fractionated real estate and works of art
Franklin Templeton launched the Franklin OnChain US Government Money Fund (FOBXX) in 2021a pioneer as the first registered fund in the United States to use public blockchain to process transactions and document share ownership.
“I’m a big fan of blockchain and technology. We had the first money market fund approved by the SEC, the SEC had us run the shareholder servicing system,” Johnson said.
At the heart of this innovation is the BENJI token. Operating on Stellar (XLM) e Polygon (MATIC) blockchain, these tokens uniquely represent the shares of the FOBXX fund.
They include assets such as government bonds, cash and repurchase agreements. They also offer a stable yield, which is very attractive for investors looking for reliable returns.
Recent data from rwa.xyz shows that the BENJI token has a market capitalization of $367 million. This impressive figure places it in second place only BlackRock USD Digital Liquidity Institutional Fund (BUIDL).
On April 25, Franklin Templeton expanded the functionality of BENJI tokens. They are now available for peer-to-peer transfer on the public blockchain.
To know more: What is Tokenization on Blockchain?
Continuing its commitment to blockchain, the company launched a Bitcoin ETF in January, achieving a modest net flow of $351 million so far. Also, February 13th Franklin Templeton has filed for SEC approval for a spot Ethereum ETFfurther integrating blockchain into its offerings.
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