Tokenization is fundamentally reshaping the conventional securitization process, as stated by Jenny Johnson, the CEO of the prominent asset management firm Franklin Templeton. Johnson characterized tokenization as “securitization on steroids” due to its profound potential to revolutionize the traditional financial sector. These remarks were delivered during CNBC’s Delivering Alpha event on September 28 and were initially reported by Cointelegraph on Sunday.
Tokenization is the process of transforming ownership rights for traditional assets into digital tokens recorded on a blockchain. These assets can encompass physical items like artworks or intangible financial instruments such as stocks and bonds.
The CEO of Franklin Templeton highlights numerous benefits associated with this approach, including streamlined payment processes, the capability to implement smart contracts, and the advantages of a secure and transparent ledger system.
Streamlining Financial Processes through Automation
Tokenization, as emphasized by Johnson, offers a pivotal advantage in automating intricate financial procedures.
To illustrate, she mentioned Rihanna, who introduced a well-received song as a non-fungible token (NFT). NFT holders can automatically receive royalties from streaming services, and as Rihanna’s music plays on platforms like Spotify, the built-in smart contracts within NFTs can promptly initiate royalty payments.
Johnson clarified that this significantly simplifies and streamlines the payment process for artists and content creators.
Potential Opportunities for Athletes
The CEO also highlighted the potential for athletes to harness tokenization to their advantage.
Athletes could offer tokens representing a share of their future income to their fans, enabling fans to invest in their favorite athletes and become stakeholders in their success.
“They may say to their fans, ‘I’m offering tokens equivalent to 10% of my future earnings. I’ll release 100,000 tokens, and voila, fans are likely to pay a premium for them.’ It’s essentially a form of securitization on steroids,” she noted.
