Regulation
Franklin Templeton CEO warns that the United States risks losing leadership in the crypto sector to other nations
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Jenny Johnson, president and CEO of Franklin Templeton, expressed concern that the United States would risk losing its leadership position in the cryptocurrency industry to other nations if it maintains a closed approach to regulation.
“I fear that if we are too closed-minded on this issue, we will cede leadership to other jurisdictions,” he said.
In a Consensus presentation on Thursday, Johnson praised the regulatory efforts of countries such as Singapore, Hong Kong and the United Arab Emirates, saying:
“Singapore, Hong Kong, the United Arab Emirates, they’ve probably also been in Europe to some extent, they’ve led more by taking different approaches in being very constructive on blockchain regulation.”
While acknowledging the risks and concerns related to cryptocurrencies, Johnson stressed the need for the United States to be proactive in its regulatory approach.
Johnson also highlighted the potential impact of cryptocurrencies on traditional businesses, saying:
“I always tell our equity teams that you better pay attention to what’s happening in the digital asset space because it’s going to hurt some of the companies that exist in the equity space.”
Ethereum and other ETFs
When asked about the prospects of Ethereum ETF, Johnson refrained from commenting directly due to ongoing approval processes. However, he did discuss Franklin Templeton’s efforts in the tokenized money market fund space.
“We actually have a tokenized money market fund that we took in 2020. And I want to say, although there is discussion about the other in the market, we were by far years ahead of that,” Johnson explained. “We’ve done a lot of work with the SEC on this. Ours is the accident, which actually happens under public surveillance.”
Johnson highlighted the benefits of operating on a public blockchain, such as the ability to allow intraday returns and peer-to-peer trading.
“The benefits are managed by the public. And we did shadow for the first six months, and then the SEC felt comfortable enough to let us just run it on the public blockchain,” he said. “So it’s one of the star chains, because it can actually enable intraday returns.”
Franklin Templeton is also exploring creating tokenized exposure to traditional ETFs that can be held in portfolios.
“We’re trying to create tokenized exposure to ETFs, the traditional ETFs in the market that you can hold in your portfolio,” Johnson said. “But because we wanted to do that, we had to build an on-chain shareholder recordkeeping system and a hot and cold storage wallet.”
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