Securitization Evolves: Franklin Templeton CEO Highlights the Power and Potential of Tokenization
Summary:
Jenny Johnson, the CEO of Franklin Templeton, suggests that securitization is evolving significantly through tokenization. While examining the future of alternate investments, she explains that tokenization not only facilitates transactions and incorporates smart contracts but also serves as a source of truth. Using Rihanna's example, who released a nonfungible token (NFT) of her song enabling holders to earn streaming royalties, Johnson illustrates the potential of tokenization. Furthermore, she implies that this technique can also benefit athletes marginally. Johnson predicts more companies are being drawn to such future-tech investments due to the appeal of disruptive technology and available capital.
Jenny Johnson, the CEO of Franklin Templeton, a globally renowned asset management firm, believes that securitization, a practice with a historical timeline lasting over half a century, is experiencing a significant evolution. Speaking during CNBC's Delivering Alpha event, Johnson mentioned that tokenization - a practice where rights to asset ownership are transformed into digital tokens on a blockchain - resembles a supercharged version of securitization, often visualized as exceeding normal expectations. These remarks by Johnson were made while she was exploring the potential future of alternate investment platforms.
Johnson emphasized that the combined allure of disruptive technology and readily available capital is drawing more businesses and their CEOs towards investing in predicted future trends, like blockchain technology. Johnson elucidated, “It works on multiple levels: it facilitates payment transactions, incorporates programmed smart contracts into tokens, and thanks to its foundation as a general ledger, it serves as a source of truth. The bearer of the token is granted all rights tied to that token."
To clarity her perspective, Johnson used the example of Rihanna, the well-known singer who in February, released a nonfungible token (NFT) of one of her hit songs, providing holders a share of streaming royalties. Johnson referred to Rihanna's pre-Super Bowl NFT launch as her favored example. "This opportunity is available to her because when a Rihanna song is streamed on Spotify, the smart contract can be activated automatically to account for the owed royalties. No external involvement is necessary. The fractional payment can then be sent to Frank, a committed fan of Rihanna's." Johnson elaborates that athletes can derive advantage from tokenization as well by selling off tokenized parts of their future revenue streams.
Johnson, who has been part of Franklin Templeton for three decades and now holds the institution's highest posts of president and CEO, navigates the workings of a $1.5 trillion asset management company that has set up offices worldwide. Franklin Templeton is amongst the many firms hoping to receive US regulatory approval for a spot Bitcoin exchange-traded fund (ETF). According to a magazine report, the transformation of music royalties into NFTs could boost the careers of upcoming musicians like Taylor Swift.
Published At
10/1/2023 7:40:34 PM
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