Franklin Templeton's Jenny Johnson on Bitcoin ETFs, RWA Tokenization and Blockchain's Potential for TradFi

AUSTIN, TX — Franklin Templeton, the $1.6 trillion asset manager based in Silicon Valley, has been at the forefront of traditional finance heavyweights pushing into the digital asset space.

"We have looked at blockchain tech [and found] this is going to be transformational and we better make sure we understand it," Jenny Johnson, president and CEO of Franklin Templeton, said during a Thursday panel discussion at Consensus 2024 in Austin.

That's why the company is running about 30 validator nodes on 12 different blockchains, for example, on Ethereum {{ETH}}, Cardano {{ADA}}, Stellar {{XLM}} and Provenance, Johnson said on the panel. That's more than what the asset manager's website shows, which mentions six networks including the same four blockchains plus Polkadot {{DOT}} and Solana {{SOL}}.

RWA tokenization

A key allure of blockchain technology, she explained, is the efficiency to record and reconcile transactions and its potential for cost savings.

"Franklin [Templeton] today has a huge number of people, a couple hundred, who just reconcile [data] between systems, then we have to reconcile with our counterparty and another firm," Johnson said.

Blockchains offer a single "source of truth" and record timing of transactions better than conventional processes, she said, which could help cut costs and decrease administrative workload.

"We're in a business where we're constantly being pressured to drive down the costs of the delivery of what we do," she added.

One example benefitting from blockchain is tokenization, making real-world assets such as funds and bonds available on digital asset rails. Franklin Templeton was a pioneer, she said, launching the first money market fund available on-chain using the Stellar network in 2021, years before rivals like BlackRock entered the space.

Bitcoin ETFs

Franklin Templeton was one of the 11 issuers approved to list spot-based bitcoin exchange-traded funds in the U.S. in January, and is also among those waiting for approval to launch a similar vehicle for the second-largest cryptocurrency ether.

Johnson said that many people are attracted to bitcoin {{BTC}} as an asset outside of the banking system that's resistant to government seizure, but ETFs offer a well-understood vehicle to get exposure.

"For me, it's a vehicle of choice," Johnson said. "An ETF is a regulated entity, which makes a lot of people more comfortable who wouldn't have transacted in this space otherwise."