Franklin Templeton CEO Predicts Blockchain Takeover in Finance Industry

• Jenny Johnson, the CEO of investment management firm Franklin Templeton, said she believes newer, more efficient blockchain networks will be the future of finance.
• Johnson also thinks some long-established players in the world of traditional finance might not survive the shift to blockchain, comparing the situation to the demise of Blockbuster.

Jenny Johnson, the CEO of investment management firm Franklin Templeton, said the global finance industry is set to evolve more in the next five years than in the last 50, driven by a shift to digital assets and distributed ledger technology.

Despite the finance industrys decade-long and largely fruitless dalliance with crypto, the tech indisputably remains key to its future, Johnson argued in a commentary piece for Forbes Crypto titled: Im the CEO of a Fortune 500 financial firm. My industry can no longer deny digital assets are the future.

We discovered the hard way there was more hype than substance, and that the tech was incapable of delivering at an institutional-grade level, Johnson said. In the past 2-3 years, though, the situation has changed profoundly.

The Franklin Templeton CEO said this period of wasted opportunity is now coming to a sudden and dramatic end.

The advantages of blockchain are so compelling that we dont foresee the shift to digital asset technology being slow or incremental.

Johnson believes the emergence of what she calls hyper efficient coordination machines, like Solana and Sui blockchains, are now in a position to totally replace large swathes of the finance industrys aging legacy infrastructure, with transaction throughputs that rival traditional networks like Visa.

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With forthcoming upgrades, public blockchains may soon be able to increase their throughput to hundreds of thousands and even millions of transactions per second.

She also highlighted DeFi and the potential benefits Uniswap-style decentralised exchanges could bring to the world of traditional finance:

As these systems become faster, their verification and security features have experienced significant improvements that make them not only resistant to hacks but also better at proving identity and asset ownership.

Related: Ethena Secures US $100M Funding From Institutional Players Franklin Templeton, Dragonfly Capital

Johnson pointed to the current geographical siloing of financial markets, which results in a fracturing of liquidity and restriction of investor access, as something decentralised exchanges could resolve.

A shift to blockchain technology could open up 24/7 trading on traditional markets, decrease the time to finalise transactions and increase the frequency at which investors are paid dividends and interest payments, according to Johnson enabling more accurate and ideally more reliable cash flows.

She said her firm sees the entire industry rapidly shifting away from current trading systems, towards systems that look much more like todays crypto markets:

We believe that the portfolios of the future will increasingly move away from todays account-based system and rely instead on digital wallets that can hold a limitless number of tokenized assets in a single place all of which can be transferred instantly, as well as lent out or staked for additional yield.

Related: SEC Chair Criticises Past Crypto Crackdown, Backs Self-Custody in DeFi Push

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She added that this financial revolution could result in the death of even long established industry players if they dont see the writing on the wall and move quickly enough. There will be winners and losers, Johnson said. 

Perhaps sooner than expected, some slow-footed legacy players may face a situation akin to Blockbuster, the once dominant video rental chain wiped out by Netflix and other new streaming services.