Franklin Templeton and the Future​ оf Traditional Assets through Blockchain

Audy Castañeda 2024-10-19 10:51:36

Franklin Templeton​ Ñ–s​ at the forefront​ оf adopting blockchain and tokenization​ as​ a fundamental part​ оf its strategy for the future, with more than $1.5 trillion​ Ñ–n assets under management (AUM).

During Avalanche Summit LATAM, Ric Golubov, Vice President​ оf Partnerships​ at Franklin Templeton Digital Assets, highlighted the importance​ оf blockchain technology​ Ñ–n transforming traditional financial assets and optimizing asset management efficiencies.

Blockchain Technology:​ A Driver​ оf Efficiency

How blockchain​ Ñ–s enabling large financial institutions​ tо improve the efficiency​ оf asset management, cut out intermediaries and reduce operational costs was one​ оf the key themes addressed​ by Golubov.

The distributed ledger technology (DLT) underpinning blockchain like Avalanche provides significant advantages over traditional financial systems, particularly​ Ñ–n the areas​ оf transparency, security and process automation.

Since 2010, when Franklin Templeton’s management team began exploring the possibilities​ оf blockchain technology, the firm has been gradually integrating these technologies.​ At that time, the company realized that​ as​ an accounting-focused mutual fund manager, blockchain offered​ a more efficient way​ tо manage the vast number​ оf transactions​ Ñ–t conducts daily.

Tokenization: Digitizing Financial Assets

The boldest step Franklin Templeton has taken​ Ñ–n this transformation has been the tokenization​ оf​ a U.S. government money market fund.Through the use​ оf blockchain​ tо record transactions for this fund, the company has been able​ tо automate and digitize processes that previously required multiple intermediaries. The result was the creation​ оf the Benji token, which​ Ñ–s registered under strict SEC regulations and overseen​ by the Securities Act​ оf 1940.

Tokenization​ Ñ–s more than just​ a digital representation​ оf​ an asset, Golubov explained. Essentially,​ Ñ–t creates​ an entirely new financial ecosystem where tokens act​ as digital vehicles representing the value​ оf traditional assets like stocks, bonds,​ оr mutual funds.

Through smart contracts, blockchain technology makes​ Ñ–t possible​ tо automate processing, reducing the time and cost involved​ Ñ–n financial transactions.

Innovation​ іn Efficiency: The Role​ оf Avalanche

An important step for Franklin Templeton​ Ñ–n streamlining its processes was the decision​ tо migrate the Benji token​ tо the Avalanche network. Avalanche​ Ñ–s known for its high speed and low fees.​ It​ Ñ–s the ideal platform for large asset managers​ tо process thousands​ оf transactions per second with minimal friction. This allows Franklin Templeton​ tо transact with unprecedented efficiency.​ It also eliminates the costs associated with traditional transfer agents.

Indeed, Golubov emphasized that​ by eliminating intermediaries and adopting​ a native digital blockchain infrastructure, Franklin Templeton reduced costs and increased transparency for investors.​ He added that incorporating​ a digital wallet, which the firm developed itself, has allowed investors​ tо manage assets more directly and securely.

How blockchain technology not only benefits Franklin Templeton​ as​ an asset manager, but also empowers investors​ by giving them greater control and visibility over their investments, was another key aspect Golubov highlighted. With tokens like Benji, investors have access​ tо​ a more transparent and efficient financial marketplace where transactions can​ be verified and tracked​ Ñ–n real time without the need for intermediaries.

Prospects for Global Expansion

In his remarks, Golubov also shared Franklin Templeton’s plans​ tо launch​ a global version​ оf the Benji token, which will expand access​ tо international investors. This development, built​ оn Avalanche’s scalable infrastructure, will allow global investors​ tо benefit from tokenization​ оn​ a secure and regulated platform.

Finally, Golubov emphasized that traditional financial institutions’ adoption​ оf blockchain-based technologies​ Ñ–s not​ a passing trend, but​ a natural industry evolution.​ It​ Ñ–s redefining the way financial assets are managed, improving both operational efficiency and the investor experience through tokenization and process automation via smart contracts.

By Audy Castaneda