Jenny Johnson, the CEO of asset management behemoth Franklin Templeton, believes that tokenization is profoundly altering the conventional securitization landscape.
Johnson likens tokenization to “supercharged securitization” due to its transformative power in reshaping the traditional financial sector.
Her insights were shared during the Delivering Alpha event hosted by CNBC on September 28, with Cointelegraph being the first to report on them the following Sunday.
Tokenization entails transforming the ownership rights of conventional assets into digital tokens within a blockchain framework.
These assets can range from tangible items like artwork to financial instruments such as stocks or bonds.
The CEO of Franklin Templeton highlights numerous perks of this method, encompassing streamlined payment processes, the capability to craft intelligent contracts, and the advantage of a transparent and secure ledger system.
Automating financial processes
Johnson further emphasized the advantages of tokenization by highlighting its capacity to automate intricate financial operations.
She referred to the instance of pop icon Rihanna, who launched a hit song in the form of a non-fungible token (NFT).
For those holding this NFT, royalties from streaming platforms become an automated benefit. When a Rihanna track gets airplay on services like Spotify, the embedded smart contracts within the NFTs instantly facilitate royalty disbursements.
Such automation not only simplifies but also accelerates the payment procedure for artists and creators, as Johnson pointed out.
Potential for athletes
Johnson also shed light on the immense potential for athletes to tap into the realm of tokenization.
She proposed that athletes could tokenize a slice of their future earnings, offering tokens to enthusiasts. This innovative approach would empower fans to invest directly in their favorite sports personalities, effectively making them shareholders in the athlete’s future successes.
She elaborated, “Imagine an athlete proposing to their fans, ‘I’m going to release tokens equivalent to 10% of my upcoming earnings. I’ll distribute 100,000 tokens.’ Likely, fans would be willing to pay a premium for such tokens. In essence, it’s the traditional concept of securitization but amplified manifold,” Johnson remarked.