Blockchain Technology Could Be ‘Massive Disruptor’ for TradFi, Says Franklin Templeton CEO
Jenny Johnson, president and CEO of the capital markets giant, joined CoinDesk TV live from I.D.E.A.S. 2022 in New York City to discuss the firm’s outlook on blockchain technology and the launch of its crypto-focused separately managed accounts.
Blockchain technology has the potential to be a massive disruptor to the traditional financial services industry, says Jenny Johnson, CEO of investment management giant Franklin Templeton.
Johnson told CoinDesk TV the firm has survived for 75 years because it has been open to adapting its business to new technologies.
“We have to be in the space,” Johnson said of the crypto sector during a special guest appearance at CoinDesk’s I.D.E.A.S. 2022 Conference in New York City. “It's a complicated space, and we probably won't see the payouts in the space for five-plus years, but you have to understand it to ensure that you're developing products that make sense.”
Franklin Templeton, which holds upwards of $1.4 trillion in assets under management (AUM) for its investors, will begin offering two crypto-focused separately managed accounts (SMA) this quarter via a partnership with Eaglebrook Advisors, a crypto-centric investment management firm.
Johnson said there is a “tremendous amount of interest” in crypto from financial advisers but also a bit of hesitation, which she says is partly due to questions about how their clients can enter the space responsibly.
“It's really difficult for a person who sits outside of the ecosystem to understand how to enter it,” Johnson said, referring to her firm’s crypto investment system. That system looks to give investors the ability to be exposed to separately managed accounts with multiple coins, such as bitcoin (BTC) and ether (ETH).
Of the conversations Johnson has had with advisers, she said they are most concerned about data as it relates to ESG (Environmental, Social and Governance) issues, sustainability and understanding what opportunities exist within the space and how they can responsibly approach them.
“One of the most difficult things for an investor who's trying to have a portfolio that takes into consideration those environmental, social and governance factors is that they don't have great data,” Johnson said. And if an adviser can’t provide the data, clients are likely to open an account elsewhere, she said later.
“ESGs could benefit from blockchain technology,” she added.
Johnson is bullish on the opportunities and the efficiency that can come from blockchain technology and the platforms behind them, referring to blockchains such as Solana and Ethereum. Her firm, she says, is looking to combine its 75 years of active investment experience with that of the digital asset ecosystem.
Despite the ongoing crypto winter, which could be making some traditional finance firms cautious, Johnson said it’s a “great time to get in,” and may give her company “more runway” than competitors who are hesitant to come in.
“We think that blockchain will be a part of the infrastructure to provide the solution around getting better and better data,” Johnson said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.