One of the giants of traditional finance is paying close attention to industry regulation as it launches a new mutual fund run on a blockchain.
Franklin Templeton's CEO, Jenny Johnson, believes that blockchain is the real game-changer in financial services, rather than Bitcoin, as it has the potential to revolutionize the industry. Johnson made these remarks during a conversation with Coindesk's chief content officer Michael Casey at the Consensus conference in Austin, Texas, where the financial services giant is a sponsor.
In her conversation with Casey, Johnson noted that while Bitcoin has been making headlines for its volatile price swings and potential to threaten the US dollar as a reserve currency, blockchain technology will have a much greater impact. "Bitcoin is the greatest distraction from the greatest disruption that is coming to financial services, which is blockchain," Johnson said.
In her 20 minute conversation with Casey, Johnson also touched on developing crypto-linked investment products in a bear market, the mood among her mutual fund giant’s clients, and her long-term hopes for the technology on Wednesday at the Consensus conference in Austin, Texas, where the firm is a sponsor.
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Discussing crypto regulation, Johnson noted differences among jurisdictions globally. "Places like Hong Kong, Singapore, and the UAE are probably a bit more advanced…I think it's important that we all recognize that this will be regulated, so it's best to work with the regulators on it."
Franklin Templeton, a 75-year-old investment firm that manages US$1.5 trillion on behalf of clients, has been actively involved in the digital asset space, having announced a US$20 million blockchain venture fund in 2021. Its digital assets team has been engaged in intensive research and technical development within the digital asset ecosystem, creating product expertise and strategy differentiation, while supporting and investing in digital asset networks.
New Money Market Fund
Recently, Franklin Templeton announced that its OnChain U.S. Government Money Fund (FOBXX), the first U.S.-registered mutual fund run on a blockchain, is now supported on Ethereum via Polygon. FOBXX is Franklin Templeton's crypto product which puts cash into American government securities, cash, and repurchase agreements.
It currently has over $270 million in assets under management, and investors can buy shares of FOBXX and hold them in digital wallets via the Benji Investments mobile app.
Johnson said she sees the "opportunity for a global Benji" and believes that multi-chain and cross-chain capabilities is an important evolution.
With blockchain technology, investments can be made more efficient for clients, Johnson said, noting that she is optimistic about the new investment opportunities that the space brings.
The future of financial services may just be on the blockchain.
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