Bitcoin is the greatest distraction from the greatest disruption, according to Jenny Johnson, President and CEO of Franklin Templeton. She said that the reason behind her love for digital assets is that one can unlock investments they never could have had access to unless they were a big institution.
Speaking at the Abu Dhabi Finance Week, Johnson said that the blockchain does three things – it has a payment mechanism, it has smart contracts that can execute without anybody being involved, and it has a general ledger, which means if someone owns the token in their wallet, they have all the rights of that token.
“My favourite example is the singer Rihanna, who came out with 300 NFTs each worth .00033% royalties to one of her songs,” said Johnson. “But why can she do that? She can do it because when a streaming service plays her song, the smart contract can execute and say stuff that has the rights.”
“If he’s a huge Rihanna fan, he holds that token. It executes and has a payment mechanism, so no third parties are involved,” she added. “So you can have fractions of cents that go and register.”
The Franklin Templeton chief said we are already witnessing exciting investment opportunities in the digital asset space.
“As a company today that is going out and buying up the image rights on social media of new college athletes, star athletes, betting on which ones are going to be professional, where one can own a pool of the potential,” said Johnson.
“That’d be something you’d never be able to own,” she said. “And if you didn’t have the stability with the technology, you wouldn’t have been able to do it.” From an asset manager, she said that it’s going to be an exciting way to deliver new uncorrelated investment capability.
Anticipating the evolution of asset management, Johnson envisioned a new breed of portfolio managers adept at navigating this dynamic landscape. She envisaged a shift in skill sets, where future managers would engage actively in diverse domains, such as sports, entertainment, and emerging talent, alongside traditional investments.
The regulatory environment in the UAE
Regarding regulatory environments for digital assets, Johnson praised the UAE and Hong Kong for their progressive approach, offering clarity in regulations. “Capital goes where it’s treated well, and one of the very important criteria is the regulatory environment,” she said.
Comparing UAE to the regulations in the US, Johnson said that the regulations have yet to really evolve. “Part of that is because it’s unclear who’s responsible for regulating,” she said.
“The UAE has been very progressive in the regulations they have come out with,” said Johnson.
According to the global asset management firm’s CEO, places with the most clarity of digital assets are the UAE and Hong Kong. “Singapore has a very interesting approach. They are approaching it by bringing in a lot of partners. And so they have a lot of pilot programs that the regulators are involved in watching so that they can build the regulation after they’ve done some testing around it,” she said.
