This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.
When I first dove into the world of finance reporting over half a decade ago, Franklin Templeton was already a significant player, yet my understanding of the landscape was quite limited. Back then, terms like “TradFi” and “crypto” were barely on my radar, but Franklin Templeton, a $1.6 trillion asset management giant, has remained relevant as my perspective has evolved alongside the industry.
A pivotal moment in my reporting came during my July interview with Sandy Kaul, a key figure at Franklin Templeton. In that conversation, she boldly asserted that all their financial products would eventually “end up on-chain,” hinting at a future where traditional financial services intertwine with burgeoning blockchain technologies. That future is fast approaching, as the company recently announced a collaboration with Binance, the leading cryptocurrency exchange, to explore digital asset initiatives.
Details about this partnership remain relatively vague, but it marks a significant shift in how traditional finance companies are approaching digital assets. Franklin Templeton aims to leverage its expertise in tokenization alongside Binance’s robust trading infrastructure to create offerings that focus on “competitive yield generation and settlement efficiency.” This collaboration is indicative of a broader trend in which established financial institutions recognize the potential of blockchain as an enhancement rather than a threat to existing systems.
Statistics from Blockworks Research illustrate Binance’s preeminence in the crypto environment; the exchange boasts a significant edge in both volume and influence within the market. It’s fascinating to see how swiftly the landscape is changing, with established firms eager to carve out their niche in increasingly competitive territories.
Sandy Kaul emphasized this transformational perspective in a recent statement: “We see blockchain not as a threat to legacy systems, but as an opportunity to reimagine them.” This sentiment is ever more relevant as Franklin Templeton expands its presence in the crypto space, evidenced by their early adoption of blockchain technology. For instance, in 2021, they launched a money market fund that utilized the Stellar blockchain for transaction recording, marking their commitment to innovative financial solutions.
That fund, represented by the BENJI token, allowed users to access shares through a digital wallet app, offering the convenience of modern fintech while operating within traditional financial frameworks. Roger Bayston, another Franklin executive, described BENJI as effectively functioning as a stablecoin with yields, positioning Franklin Templeton favorably ahead of competitors like BlackRock, which launched a similar product dubbed BUIDL about a year later.
However, it’s worth noting that BUIDL swiftly surpassed Franklin’s offering regarding assets under management, currently standing at around $2.2 billion compared to Franklin’s $740 million. This landscape of shifting market dominance further demonstrates the competitive pressures and rapid innovations fueled by digital assets.
The echoes of BlackRock’s historic partnership with Coinbase in 2022 resonate in today’s announcement, emphasizing the growing need for collaboration between traditional finance and the ever-expanding decentralized finance (DeFi) sector. As more firms adopt this strategic approach, it becomes imperative for reporters and industry watchers to stay vigilant and avoid repetitive narratives, as the pace of innovation is relentless.
Jenny Johnson, CEO of Franklin Templeton, has predicted that we’ll witness more transformation in financial market infrastructure over the next five years than in the preceding half-century. This observation highlights the urgency and excitement surrounding the intersection of finance and technology, making the present an exhilarating time for both journalists and readers passionate about crypto and finance.
Get the news in your inbox. Explore Blockworks newsletters:
