Blockchain technology could be “massively disruptive” for TradFi, says CEO Franklin Templeton
Blockchain technology has the potential to be a massive disruption to the traditional financial industry, says Jenny Johnson, CEO of investment management giant Franklin Templeton.
Johnson told CoinDesk TV that the firm has survived for 75 years because it has been open to adapting its business to new technologies.
“We need to be in the space,” Johnson said of the crypto sector during a special guest appearance at CoinDesk’s IDEAS 2022 conference in New York City. “It’s a complicated space, and we probably won’t see the payoffs in the space for five-plus years, but you have to understand it to make sure you’re developing products that make sense.”
Franklin Templeton, which has over $1.4 trillion in assets under management (AUM) for its investors, will begin offering two crypto-focused separately managed accounts (SMAs) this quarter via a partnership with Eaglebrook Advisors, a crypto-centric investment management firm.
Read more: Investment Management giant Franklin Templeton will offer digital asset strategies to wealth managers
Johnson said there is a “tremendous amount of interest” in crypto from financial advisors, but also some hesitation, which she says is partly due to questions about how their clients can enter the space responsibly.
“It’s very difficult for a person sitting outside the ecosystem to understand how to get into it,” Johnson said, referring to the firm’s crypto investment system. This system appears to give investors the opportunity to gain exposure to separately managed accounts with multiple coins, such as bitcoin (BTC) and ether (ETH).
Of the conversations Johnson has had with advisors, she said they are most concerned about data as it relates to ESG (Environmental, Social and Governance) issues, sustainability and understanding what opportunities exist in the space and how to approach them in a responsible manner.
“One of the hardest things for an investor trying to have a portfolio that takes into account the environmental, social and governance factors is that they don’t have good data,” Johnson said. And if an adviser can’t provide the data, clients are likely to open an account elsewhere, she later said.
Read more: Fund Giant Franklin Templeton Eyes Bitcoin, Ether Trading Planned Hiring
“ESGs can benefit from blockchain technology,” she added.
Johnson is optimistic about the possibilities and efficiencies that can come from blockchain technology and the platforms behind them, citing blockchains like Solana and Ethereum. Her firm, she says, wants to combine its 75 years of active investment experience with the digital asset ecosystem.
Despite the ongoing crypto winter, which may make some traditional financial firms cautious, Johnson said it’s a “nice time to get in,” and could give her company “more runway” than competitors who are hesitant to enter.
“We believe that blockchain will be part of the infrastructure to provide the solution around getting better and better data,” Johnson said.
