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Franklin Templeton Doubles Down on Digital Assets: From Running Blockchain Nodes to Tokenization, ETFs

This recent shift is driven by a belief in the transformative potential of blockchain technology and its ability to revolutionize the financial landscape.

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Franklin Templeton is no stranger to the digital asset space, having launched the first money market fund available on-chain using the Stellar network in 2021.

But the asset manager with $1.6 trillion under management, has been actively engaging with the underlying technology. During a recent panel discussion at Consensus 2024, the company's president and CEO Jenny Johnson revealed the company's focus on blockchain technology, real-world asset tokenization, and crypto exchange-traded funds (ETFs).

"We have looked at blockchain tech [and found] this is going to be transformational and we better make sure we understand it," Johnson said, Coindesk reported.

Franklin Templeton currently runs approximately 30 validator nodes on 12 different blockchains, including Ethereum, Cardano, Stellar, and Provenance. This represents a significant increase from the six networks previously mentioned on their website.

Johnson emphasized the potential of blockchain technology to streamline operations and reduce costs. She pointed out that Franklin Templeton currently employs hundreds of people for data reconciliation between systems, a process that could be significantly improved with blockchain technology.

"We're in a business where we're constantly being pressured to drive down the costs of the delivery of what we do," Johnson said.

Franklin Templeton has also been a leader in tokenization, the process of converting real-world assets like funds and bonds into digital tokens. In 2021, the firm launched the first money market fund available on-chain using the Stellar network.

Adding to their digital asset strategy, Franklin Templeton is awaiting approval for an Ether ETF, the second-largest cryptocurrency. This follows their inclusion among the 11 issuers approved to list spot-based bitcoin ETFs in the US earlier this year.

Johnson acknowledged the appeal of Bitcoin as an asset outside the traditional financial system, but also highlighted the importance of ETFs in providing a familiar and regulated way for investors to gain exposure to the digital asset market.

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