Jenny Johnson, CEO of Franklin Templeton, a leading asset management firm with $1.6 trillion in assets under management, expressed her enduring enthusiasm for blockchain technology during an interview with Bloomberg’s David Westin. Johnson, who hails from the lineage of Franklin Templeton’s founder Rupert Harris Johnson and joined the company in 1988, holds a prominent position as one of finance’s most influential women.
Highlighting the significance of mutual funds within Franklin Templeton’s operations, Johnson noted that approximately $900 billion of the firm’s assets, out of the total $1.6 trillion, are allocated to mutual funds, with an additional $78 billion in private credit. She emphasized her longstanding interest in blockchain innovation and its potential impact on the industry.
Johnson emphasized the cost-efficiency of blockchain technology, expressing astonishment at its reduced operational expenses compared to traditional systems. She anticipates that blockchain will unlock new investment avenues, envisioning a future where ETFs and mutual funds seamlessly operate on blockchain platforms.
So How Would a Tokenized ETF Work?
In a recent column, Kent Thune, a research analyst for ETF.com, delves into the concept of tokenized ETFs, also referred to as security token ETFs, which amalgamate the framework of an ETF with the advantages of blockchain technology.
Thune elaborates, stating that a tokenized ETF would essentially digitize the underlying assets of the ETF. These tokenized representations would find their place on a blockchain, a secure and transparent digital ledger. Investors would possess digital tokens symbolizing ownership in the ETF, departing from the conventional ETF shares.
Wall Street and Tokenization
According to a report from Benzinga, Wall Street firms are intensifying their efforts to tokenize assets on the blockchain. Tokenization involves the conversion of both tangible and intangible assets into digital tokens, spanning from stocks and bonds to gold bullion, real estate, and even digital and physical art.
In his annual letter to shareholders in March 2023, BlackRock CEO Larry Fink acknowledged the operational potential of certain technologies within the digital assets sphere, expressing enthusiasm for their potential applications. Fink highlighted that the tokenization of asset classes holds promise in enhancing efficiencies within capital markets, streamlining value chains, and ultimately improving cost and access for investors.
