The future of asset management is changing on the chain, but the transition reveals a major structural conflict over traditional companies’ revenues.
Speaking on a panel at the Proof of Talk summit in Paris, Jenny Johnson, CEO of Franklin Templeton, a $1.74 trillion asset manager, spoke openly to the industry’s hesitancy to deploy decentralized networks. According to Johnson, large financial firms are dragging their feet because public blockchain architecture directly challenges their existing profitability.
“This technology threatens a large number of business models that exist today in traditional finance,” Johnson said bluntly. “If you see any kind of hesitation, it’s because there’s a threat to the business model. Think about the tolls in a transaction.”
She explained that if a blockchain can handle settlement instantly via a smart contract, big banks can no longer charge transaction fees as third-party intermediaries.
While crypto-native networks favor open architecture, traditional financial systems are beginning to migrate to public networks due to the significant transaction efficiencies. To demonstrate the cost savings, Johnson cited Franklin Templeton’s history of running its tokenized money market fund, Benji, on public networks.
“It was so dramatically cheaper,” Johnson explained, breaking down the internal data. “It cost us about $1.30 a transaction for 50,000 transactions on the old system. And it cost us about $1.13 to run on the Stellar blockchain.”
Johnson’s mention of Benji comes just hours after the Wall Street giant announced it is expanding its digital asset strategy through a new partnership with MoonPay that will allow institutional investors to move between stablecoins and the asset manager’s tokenized money market fund through an onchain workflow.
“On a day-to-day basis, anyone—individual, medium-sized or large business—we want a trusted party,” Johnson noted. “We don’t want to keep our assets in our private wallets, in our safes at home. We want to delegate that security to a third party. And that’s why custodians or banks still have a future.”
The shift of institutional wealth to digital assets will depend entirely on building standard, low-cost compliance rails for legacy mutual funds. While Blockstream CEO Adam Back pointed out that bitcoin allows users to maintain true fiscal privacy without an institutional partner, Johnson concluded that standard investors will continue to demand a highly regulated custodial layer.
