Jenny Johnson, President and CEO of Franklin Templeton, recently reiterated her strong support for blockchain technology during an interview with Bloomberg’s David Westland at the 27th Annual Milken Institute Global Conference in California. Johnson highlighted the potential benefits of blockchain and discussed the firm’s experience with tokenization and generative artificial intelligence.
Tokenization
Johnson expressed her enthusiasm for blockchain, noting its efficiency and cost-effectiveness. She shared that Franklin Templeton conducted an experiment processing account records using traditional methods and blockchain simultaneously for six to eight months. The results were significantly in favour of blockchain, proving to be much less costly.
“We were astonished by how much less costly it was to run it on blockchain,” said Johnson.
She believes that blockchain technology will eventually host all ETFs and mutual funds, attributing this shift to the high costs associated with verifying data across different systems. Blockchain, with its single source of truth, eliminates the need for repeated data verification between disparate systems and external parties.
Johnson cited an example involving pop star Rihanna, who released 300 nonfungible tokens (NFTs) that allowed their owners to earn a small percentage of royalties from one of her songs via smart contracts. This example, she noted, illustrates the expansive investment opportunities that blockchain can facilitate.
Generative AI
The conversation also touched on generative artificial intelligence. Johnson recognized the value of generative AI systems but cautioned that they can be inconsistent, excelling in some areas while failing in others.
Franklin Templeton has partnered with Microsoft to develop an AI-powered sales assistant, indicating the firm’s commitment to leveraging AI in finance. Johnson highlighted the potential of AI-powered translation services to overcome language barriers in the financial sector, identifying further investment opportunities in this space.
Johnson’s comments underscore Franklin Templeton’s forward-looking approach to integrating advanced technologies like blockchain and AI to enhance efficiency, reduce costs, and open new investment avenues.