July 16, 2021, Jenny Johnson, the CEO of Franklin Templeton, whose fund oversees more than $1.5 trillion in assets, is another believer in blockchain among the nation’s largest financial organizations.
Johnson predicted that blockchain technology would be “hugely disruptive” in a recent interview with Yahoo Finance, allowing ordinary people to make tiny investments in previously inaccessible assets like major real estate developments.
She also stated that she is not a “big lover” of bitcoin, due to the cryptocurrency’s volatility.
“The tokenization and blockchain are going to be hugely disruptive to the financial services industry,” she says. “We are at the very, very early stages of that.”
“I’m not even sure folks completely understand how disruptive that could be,” she said. “It is something I’m spending a lot of time on.
My team is spending a lot of time just trying to think about and understand.”
The sale and acquisition of assets such as cryptocurrencies or non-fungible tokens, also known as NFTs, is made possible by blockchain, a digital ledger that records transactions without the need for a centralized manager.
The technology is best recognized as the foundation for the widely used but disputed digital currency bitcoin.
Warren Buffett, the CEO of Berkshire Hathaway, labeled bitcoin as “rat poison” in 2018, and a study done by JPMorgan Chase last month indicated that one-third of mainstream investment firms concur with Buffett’s assessment.
Large financial institutions, on the other hand, are warming to blockchain, with JPMorgan Chase creating a division dedicated to blockchain-based projects.
Johnson, who took over as CEO of Franklin Templeton in February, says that blockchain will allow ordinary investors to buy illiquid assets such as real estate projects and sports clubs that are currently only available to the wealthy.
She gives as an example, “If you own the Empire State Building, you could sell it to a million people and probably get a higher return, because you’re able to sell it to a lot more people, and they can then go and sell it without quoting the title company and all those intermediaries, because the entire contract, including who’s managing that building, is built into the token.
That becomes really interesting and starts to unlock these illiquid assets.”
Johnson, the granddaughter of Franklin Templeton founder Rupert Johnson, started working in the investment fund’s mailroom when she was 14 years old.
She joined Franklin Templeton in the late 1980s after a period at Drexel Burnham, where she held different management positions until becoming CEO.
Jenny Johnson stated that her interest in blockchain does not extend to bitcoin.
She mentioned the cryptocurrency’s large drop earlier this year, just a few months after it soared to unprecedented heights thanks to public support from Tesla CEO Elon Musk.
“On the digital assets, I think things like bitcoin, I’m not a big fan,” she says.
“Obviously been wrong in so many ways, although you could have lost 50% if you bought in at kind of the peak noise, pre-Elon Musk’s tweet.”
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