Since last year, global asset management businesses have been scrambling to illustrate that they are making progress in blockchain and digital asset adoption.
The revolutionary processes and technologies once languishing in innovation units and kept well and truly at arm’s length from day-to-day operations, are now moving centre stage as well-prepared buy-side firms seek to seize first move advantage.
Franklin Templeton is undoubtedly one of these. Since taking the chief executive’s chair in 2020, Jenny Johnson has been more vocal that most of her peers about the asset manager’s bold investment in blockchain technology.
Under her leadership, the firm developed its proprietary Benji Technology Platform, designed to facilitate trading, management, and administration of token-based investments.
Using this platform, the group launched the world’s first US registered mutual fund in 2021 with blockchain-integrated technology to process transactions and record share ownership.
Earlier this year, Franklin Templeton sought to declare another industry first, using the Benji Platform to launch the first fully tokenised UCITS fund on a public blockchain in Luxembourg and secure regulatory approval to launch the first retail tokenised fund in Singapore. The Benji Platform now operates across eight different public blockchains, including Stellar, Ethereum and Solana.
Over the past five years, Franklin Templeton has developed a reputation for a host of digital asset firsts and its project list has been informed by its in house research unit – called “FIRST” aka the Franklin Innovative Research Strategies and Technology team, which gathers intelligence from clients, partners and policymakers.
Robert Crossley, head of industry services at Franklin Templeton is part of the FIRST team and is responsible for some of the qualitative research gathering.
“We conduct interviews with the leadership teams and C suite of asset managers, asset owners, fintechs and web3 companies who’s combined assets under management are between US $50 and $60 trillion,” he explains.
“These findings enable us to gain a privileged and unique insight into what people are thinking but also allows us to be aware of issues that are not currently front of mind for the industry.
“We can asset what the problems are, the dynamics of the players and look at where we are heading.”
From this market intelligence, the business has rapidly built out its product offering throughout 2024, introducing a spot Bitcoin ETF, a spot Ethereum ETF and in early 2025, a crypto index ETF.
The group has also filed for a Solana ETF with staking features, again furthering Johnson’s vision of a fully tokenised future for mutual funds and ETFs.
“Our realisation was that our entire industry is based on record keeping,” Crossley says.
“Jenny Johnson used to run operations and technology, so had a very deep appreciation of that intersection between the potential for record keeping technology changing how we think and do everything, shortening value chains and the cross over with that in investment management.”
He says that the business is focussed on bringing the worlds of decentralised and traditional finance together by making them more interoperable and by accelerating “the journey” of its traditional clients into a future where they benefit from harvesting the benefits of this new technology.
“When you look at the relative sizes of decentralised finance and traditional finance, one is small and one is enormous,” Crossley explains.
“They might be future clients, but in terms of their scale here and now today, it is always going to be ‘how can we bring our understanding and technology to benefit our existing clients.”
Crossley says that larger, more sophisticated sovereign wealth funds already know what they want Franklin Templeton to build next because they don’t need education, they just want access to specific opportunities.
He adds: “Our existing clients are absolutely the priority but the value we create is a function of where they are on their journey.”
When pressed for more specifics on the type of client that are the priority right now, Crossley explains that there a multiple client profiles which need to be considered, in wealth management, family offices, retail and the institutional asset owners.
“The understanding of the technology is different for all of them. Institutional clients want exposure to growth and efficiency. There are a whole set of benefits to a corporate treasurer that a wealth manager wouldn’t care about,” he says.
While the investment considerations are multi-faceted for a business the size of Franklin Templeton, clients in all segments are benefiting from its commitment to a digitalised future.
The company’s strengthened presence in the crypto exchange-traded product (ETP) space, by introducing new investment vehicles with exposure to digital assets while mitigating volatility has been well received by clients.
Its broader strategy of positioning digital assets as “Frontier Risk Alternatives” by emphasising their potential for long-term growth has captured the imagination of investors keen to embrace on-chain assets early on.
Now, as the regulatory landscape in the US, Europe and Asia continues to shift, Franklin Templeton will be hoping to successfully navigate compliance challenges while expanding its footprint. With institutional adoption on the rise, the firm’s latest initiatives signal a deeper integration of blockchain technology into mainstream investment portfolios.
