- Franklin Templeton CEO, Jenny Johnson, has said she’s a “huge fan” of blockchain tech and believes it has the potential to revolutionise the finance industry—reducing costs and creating new investment opportunities.
- Johnson also believes all ETFs and mutual funds will eventually take advantage of blockchain technology.
The CEO of asset manager Franklin Templeton, Jenny Johnson, has given blockchain technology a huge vote of confidence, telling Bloomberg she believes it’s a very efficient technology which allows for significant cost savings and opens up a large range of new investment opportunities.
Johnson also said she believes all ETFs and mutual funds will eventually take advantage of blockchain technology.
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Franklin Templeton’s Blockchain Experiment
During an interview with Bloomberg’s David Westland, Johnson was very clear about her position on blockchain, saying “I am a huge fan of blockchain.”
Johnson said she believes blockchain could be a revolutionary technology for the finance industry:
We think it (blockchain technology) is gonna open up a lot of new investment opportunities, and honestly, eventually I think all ETFs and mutual funds are all gonna be on blockchain.
Jenny Johnson, Franklin Templeton CEOShe described an internal experiment Franklin Templeton ran where the firm compared its regular record-keeping system to a blockchain based system over a period of six to eight months to assess if blockchain could provide any benefits. According to Johnson the firm was “astonished by how much less costly it was to run it on blockchain.”
Traditional bookkeeping systems require that each party reconcile every transaction with the other parties, adding significant complexity and increasing the risk of mistakes. But Johnson says with blockchain everyone has access to the single source of truth for every transaction, removing the need for reconciliation and reducing costs:
There’s a huge cost in financial services to reconciling data between systems, once you reconcile it within your own firm, you’ve then got to reconcile it with your counterparty — in the case of blockchain there’s only one source of truth, that transaction happens and everybody has the source of truth. And so that drives out a lot of costs.
Jenny Johnson, Franklin Templeton CEOBlockchain Creates New Investment Opportunities
Johnson also pointed to the new classes of investment products blockchain technology allows for, mentioning a specific use case where Rihanna issued an NFT that allowed holders to receive a small royalty every time the song link to the token is streamed — she referred to this as an example of a “cultural asset”.
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Despite all the positives of blockchain, Johnson is also aware the crypto market can be particularly risky, especially for new investors, warning that “It is a challenge and there are definitely some things where you can step on some land mines.”
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