Franklin Templeton CEO: Blockchain offers major cost savings for tokenization

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Franklin Templeton CEO Jenny Johnson, speaking at the 27th Annual Milken Institute Global Conference in California, praised blockchain’s efficiency and cost reduction in asset tokenization and shared her thoughts on the benefits of generative AI.

Johnson stated that the company ran a parallel experiment for six to eight months, processing account records using both traditional and blockchain methods. The results showed that blockchain was more cost-effective and produced fewer errors.

“We used to run our own in-house, one of the few firms that did. And the one that we built on blockchain. So these are the records of the shareholders and we parallel process for a period of 6 to 8 months,” Johnson said.

“And we were astonished by how much less, how much cost it was to run a blockchain. It’s a very effective technology, and we think it is going to open up a lot of new investment opportunities,” she emphasized.

Johnson predicts that all ETFs and mutual funds could eventually transition to blockchain technology. She believes this shift would lead to significant cost savings due to the elimination of data verification between different systems on the blockchain.

“Eventually, I think exchange-traded funds (ETFs) and mutual funds are all going to be on blockchain,” Johnson stated.

“In the case of blockchain, there’s only one source of trust. That transaction happens, everybody has the source of trust, and so that drives out a lot of costs. And when you can drive out the friction in transactions, you can start to invest in new areas,” she explained.

Franklin Templeton is behind one of the world’s leading equity tokenized funds, the Franklin OnChain US Government Money Fund (FOBXX), represented by the BENJI token. As of May 12, the BENJI token had a market capitalization of $368 million, according to Dune Analytics.

Data is the next oil

In addition to tokenization, Johnson also discussed the role of generative artificial intelligence (AI) in assisting asset managers to better meet customers’ needs.

According to her, “data is the next oil next year.” She believes that large asset managers will have an edge in the AI race because these firms have much proprietary data to analyze and train AI models.

Johnson said Franklin Templeton has introduced an AI bot to their help desk to assist with handling inquiries, and the bot is capable of handling 60% of queries.

However, the real potential is “a model that’s leveraging a bunch of different AI,” she noted. She believes these advancements could pave the way for highly personalized investment strategies.

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