$1.3T Asset Manager Exploring Use Cases for NFTs

After issuing an NFT to certain clients, Franklin Templeton is “devoted to uncovering new applications for these assets,” firm’s head of digital assets technology says

article-image

ArtemisDiana/Shutterstock.com

share

One of the world’s largest asset managers is exploring the use cases for NFTs despite a turbulent crypto market environment, noting such tokens’ relevance beyond just digital art.

The company minted its first NFTs — issuing them to attendees of its first Innovation Forum held in September to offer clients a way to explore the digital assets ecosystem — and now seeks to move further into the space.

“We see NFTs in their literal sense and more generally than just for their application with artwork or collectibles,” Mike Muir, Franklin Templeton’s head of digital assets technology, told Blockworks. “[An NFT] is an applicable construct for any unique asset for which only one exists.”

For example, Muir added, loans and property titles are unique assets that are not fungible. 

Franklin Templeton allowed attendees of its Innovation Forum the ability to download the NFT through the firm’s Benji Investments app. It acted as “a badge” and was non-transferrable, the company said, and clients could use the token to access research from the Franklin Templeton digital assets team.

US clients across asset management and financial services have shown interest in interacting with digital assets such as NFTs, according to the company.

“Firsthand practical experiences like this create understanding and foster contemplation and thought as to what else may be possible,” Muir said. “In the long term, we are considering generalizing our issuance of NFTs for a variety of purposes and are devoted to uncovering new applications for these assets.”

Dmitriy Berenzon, a research partner at early-stage venture fund 1kx, said that exploring the issuance of on-chain assets is the right way to go for institutions. He added that Franklin Templeton is correctly using this tool to drive more engagement with their community.

“It is not about permissioned blockchains that try to improve the efficiency of walled gardens, but rather about permissionless, crypto networks that drive human coordination at scale through the use of tokens,” Berenzon told Blockworks. 

For other large financial services companies, NFTs can offer additional avenues for interacting with on-chain assets and liquidity, such as liquidity pools gated by know-your-customer (KYC) requirements, the 1kx research partner added.

“That said, they likely need more regulatory clarity prior to committing any significant amount of balance sheet,” Berenzon said. 

An evolution for fund managers

Franklin Templeton, which had roughly $1.3 trillion in assets under management as of Oct. 31, has been moving deeper into the crypto space in recent months.

The company launched the Franklin OnChain U.S. Government Money Fund — a mutual fund using blockchain to process transactions and record share ownership — in April 2021.

The fund manager unveiled its first crypto-focused separately managed accounts (SMAs) for investment professionals in September.

Roger Bayston, the company’s segment lead, called digital assets “frontier risk alternatives” in an October interview with Blockworks. He added that Franklin Templeton was looking into bringing additional digital asset investment strategies to market.

The fund giant’s move into NFTs comes after asset manager VanEck launched an NFT collection in May designed to ​​”build an active community of crypto-focused investors,” the firm said.

Though ProChain Capital President David Tawil said at the time VanEck’s launch was “a bit of a gimmicky way” to draw people into NFTs, he added that the effort could bridge gaps between the collectibles aspect of NFTs and their broader use cases.

VanEck’s NFT community started off with nearly 50,000 sign-ups, and the firm connected its members at in-person and virtual events, according to Matthew Bartlett, who leads VanEck’s NFT community and Web3 efforts. 

Bartlett told Blockworks that the firm is encouraged to see another global asset manager using NFTs to foster client engagement and community building. 

“We strongly believe that NFTs and related blockchain applications will become integral parts of the client engagement experience across a range of industries, from finance to social media to consumer technology,” he said.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Cover Vertex.jpg

Research

The proliferation of new perp DEXs has led to fragmented liquidity across various DEXs and chains. Vertex, known for its vertically-integrated DEX that includes spot, perpetual, and integrated money markets, is now tackling cross-chain liquidity fragmentation through horizontal integration with the launch of new Edge instances. Vertex's integrated offerings and cross-margined account structure amplify the benefits of new instances: native cross-chain spot trading, optimized cross-chain basis trading, consistent interest rates, reduced bridging friction, and more.

article-image

Partnering with EtherFi and Angle, the fully on-chain perp DEX features bespoke collateral

article-image

Sponsored

Gavin Wood introduced the next evolutionary step for the Polkadot network: the Join-Accumulate Machine, or JAM

article-image

The side events were the places to be at Consensus 2024, according to attendees

article-image

Also, who’s come out swinging in the spot ether ETF fee war — and who could undercut them

article-image

I know it is not in their nature, but US regulators could learn a lot by researching the digital asset frameworks that overseas regulators have already gotten right

article-image

Also, the ETF hype train can count out at least one member