Jenny Johnson, CEO of Franklin Templeton, one of the biggest asset managers in the world, says securitization, a practice with over 50 years of experience, is going through a drastic transition.
Johnson compared tokenization, the process of transforming asset ownership rights into digital tokens on a blockchain, to “securitization done on steroids,” a phrase frequently used to describe something that exceeds expectations, at the CNBC Delivering Alpha event.
An examination of the prospects of alternative investment vehicles included Johnson’s comments. As a consequence of increased access to capital and technological disruption, more businesses and CEOs are investing in “things for the future,” such as blockchain technology, according to the executive. Johnson commented:
“One is that it offers a payment method. Second, it enables the programming of smart contracts into the token. Third, since it’s a general ledger, it has a reliable source of information. Therefore, the owner of the token is given full ownership of it.
Johnson cited Rihanna as an example to support her argument. In February, the artist issued one of her popular compositions as a nonfungible token (NFT), allowing holders to receive a portion of streaming revenues. Regarding the NFT collection that was introduced just before the Super Bowl, she stated, “My preferred example is Rihanna.
I understand that she is only testing the market with these 300 NFTs. So how is that possible for her? Because Spotify can execute the smart contract and say, “I owe royalties here, so nobody has to be involved in it,” when a Rihanna song is played, she is able to do this. And Frank, a big fan of Rihanna, may receive the small cash. Johnson has worked for Franklin Templeton for more than 30 years, and as president and CEO, he is currently in charge of the executive team. Franklin, a $1.5 trillion asset manager with offices around the globe, is one of the firms awaiting regulatory approval in the United States for a spot Bitcoin exchange-traded fund.