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Franklin CEO: Tokenization is like "steroids for securitization," leading the market through a massive transformation.

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Franklin CEO: Tokenization is like "steroids for securitization," leading the market through a massive transformation.

Jenny Johnson, CEO of Franklin Templeton, one of the world's largest asset management companies, spoke at CNBC's Delivering Alpha event, discussing how digital assets are disrupting securitization and financial markets. She believes that tokenization is like "steroids for securitization" and is leading the market through a significant transformation.

Tokenizing the U.S. Treasury Market's Biggest Player Discusses Blockchain Core Technology

Johnson has been with Franklin Templeton for over 30 years and currently serves as President and CEO of the company's executive leadership team. Franklin is an asset management firm with assets under management of $1.5 trillion, and Franklin's OnChain U.S. Government Money Fund FOBXX is the largest player in the tokenized U.S. Treasury market, and recently filed an application with the SEC for a spot Bitcoin ETF.

Johnson discussed the future of alternative investment tools in her talk. She pointed out that available capital and technology have attracted more companies and CEOs to invest in blockchain technology and other "future-oriented things." This is because blockchain technology possesses the following core capabilities:

  • Allows for payment mechanisms
  • Allows for programming smart contracts into tokens
  • Because it is a general ledger with a source of truth. Therefore, ownership of the token is granted to whoever holds it

"Steroid Securitization" Will Disrupt Traditional Business Models

Johnson used singer Rihanna as an example to illustrate her point. In February of this year, Rihanna released a popular song in the form of an NFT, allowing holders to earn a portion of royalties through streaming platforms.

I know she was just testing the market with these 300 NFTs. When Spotify plays Rihanna's song, this technology can use smart contracts to pay a portion of the royalties to her loyal fans without anyone having to do the math.

According to a previous report by CoinDesk, Rihanna's NFTs were priced at $210 each and sold out within minutes. Each holder will receive "a fraction of 0.0033% of the streaming royalties" of the song. Holders will first receive an upfront licensing fee, followed by payments every six months based on streaming revenue. According to data from AnotherBlock, the current floor price for this NFT is 0.29 ETH, approximately $500.

Johnson also mentioned that athletes can use this technology to sign contracts. They can tokenize future income sources for sale, and fans may pay a premium for this.

Johnson described this as "steroid securitization," a term often used to describe things that exceed expectations. Blockchain technology will make this possible and enable other interesting companies to disrupt some of the traditional business models we have today, as Johnson anticipates.