# Tokenizing Cash and Institutional Blockchain Infrastructure

**Podcast:** The Milk Road Show
**Published:** 2026-07-01

## Transcript

rather than having your head in the sand and ignore things, you have to have a spirit of innovation and exploration.
We're in the business of taking risk for clients, not...
reducing risk for them.
But if we're in the business of taking risk, then we're going to need to keep unpacking technologies and opportunities that come forward, including blockchain, to be able to create better outcomes for customers and clients.
Bitcoin is fighting to hang on to the $60,000 price level, but institutions have never been more bullish.
When will this bear market end?
And what are the big players building now to prepare for when the bulls come back?
Hello, and welcome to The Milk Road Show, the podcast that knows that Benjamin Franklin would have loved Bitcoin.
I'm your host, John Gillan.
Today is Wednesday.
day, July 1st, and today we are joined by Roger Basin.
Roger is the executive vice president and head of digital assets at Franklin Templeton, where he leads the firm strategy and product development in digital assets, tokenization, and the integration of crypto into traditional finance, which is something we're all excited about these days.
Roger has over 35 years of experience in the financial services industry, and he's going to share a ton of alpha with us today.
So if that sounds good to you, make sure you like and subscribe.
Share this episode with somebody who's going to enjoy it.
Today's episode is brought to you by BitGet, stocks 2.0 with real liquidity, real dividends.
And without further ado, welcome to The Milkrow Show.
Roger, how are you, sir?
I'm great.
Thank you, John.
Thanks for having us.
Happy early 4th of July to the country.
Well, I hope there's a lot to celebrate this 4th of July.
Roger, in June, you all completed an acquisition of 250 Digital and launched something called Franklin Crypto.
And I think this has gotten a lot of attention.
And I'd love for you to just sort of explain a little bit about this dedicated digital asset management business.
Where does this sit in the larger strategy for Franklin Templeton in terms of their digital assets initiatives here?
Well, you know, Franklin Templeton has been engaged in digital asset journey for lots of years now, going on nine years since we kind of piloted our first projects about how we could use blockchain infrastructure in the underlying asset management business.
Our core business is advice, offering advice, advice on a vast array of assets, public and private.
And digital assets are one of those that we see as being increasingly important for investors to hold in their portfolio as a diversified basket.
of strategies and solutions depending on where they are in their investment cycle, those individuals or institutions.
And so Franklin Crypto has been created as a kind of an offshoot of maturation of our digital asset ventures to be able to really focus specifically on offering that advice to customers and clients globally as that asset class continues to grow and emerge and play important roles in client portfolios.
We are deep in a bear market.
It's early days of Franklin Crypto.
How's it going so far?
And what's the conversation and the advice you've been giving been like in this deep bear market that we're seeing here?
Well, I think we have a pretty unique situation or, you know, at least in understanding of where what's happening in the overall industry.
And that's because we are so deep into the infrastructure build.
the shifting of capital markets and asset management underpinnings into blockchain environments for their obvious benefits, the decreasing the friction and the costs that customers and clients might bear in receiving services.
And so we are building and building and building and building.
And despite the asset values themselves in crypto being relatively flat or, as you point out, a bear market, boy, you can only think about you know, positive outcomes because, you know, in the past couple of, I think the past year and a half, RWA has been a super popular topic.
And you see the explosion, a continued explosion of RWA.
And you think about the total amount of public or private assets that can migrate on chain.
We're just beginning, beginning to just scratch the surface of that in this journey.
So we have a lot of...
positive thoughts about the integration and the replacement of the legacy underpinnings of the capital markets and asset management specific using these blockchain environments.
And so we just remain super positive.
And we would expect as momentum investors shift around that maybe they were in crypto and now they're in AI and what comes next?
We just see these infrastructures.
These are like utilities in the same way that we put up poles and strung electricity and built other sorts of infrastructure to allow the economy to grow over time.
We see these pipes, these utility pipes, these blockchain infrastructures being extremely critical for the information-based economies that are continuing to grow and grow and grow and grow across the planet.
Guys, listen, we are at a very crucial point in time right now.
AI stocks have ripped.
They're going to keep ripping.
Our analysts on the AI side are up like literally 100% or more on quite a few calls.
And crypto is about to boom again, or at least it feels that way.
If you want all the insight on what we're buying, what our analysts are doing, what's on their watch list, all of that is in Milk Road Pro.
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Gotcha.
Okay.
So sentiment price, maybe not so great at the moment, but the fundamentals, the infrastructure for a future economy, stronger than ever and growing there.
You said Franklin Templeton has been very active in digital assets for a long time.
One of the things that I wanted to check in with you about is the Benji token and the Benji technology platform overall.
I think the official name for this, I want to...
read this into the record here is the Franklin On-Chain U.S.
Government Money Market Fund or the Tokenized Benji Fund.
Explain to our audience what this is, how this works in practice and where you are with that product right now.
Yeah, it has an official name that we have registered.
It is an actual mutual fund.
It's a money market mutual fund.
Very specific rules around money market mutual funds.
But money market funds have been in existence for 80 some years.
um you know going back to the to the 1940 act by and large and there largely have been savings vehicles um especially for that part of your asset allocation that you're wanting to keep liquid you might need these funds i think the total market of money market funds in the us is somewhere near seven trillion us dollars so not a small market a very large market and not just used by individuals individuals but also from institutions So institutions like Franklin Resources, a parent company for Franklin Templeton, that's a publicly traded company.
Our CFO uses both bank accounts as well as money market funds to maintain liquidity, manage our cash over different parts of the business cycle.
And so they've been embedded into the economy for a long period of time.
I mean, they're so prevalent that the monetary policy authorities consider money market funds as one of the measures of money supply, M2, in fact.
they call it well what blockchain is doing the infrastructure is doing it's taking these near money constructs like money funds and making them move just as fast as fiat by and large with a big difference in the case of benji or our fobxx which is the ticker symbol by the way for our on-chain fund that's the us version by the way it's it's allowing uh money to move as fast as fiat but carry now in this macroeconomic environment interest.
So if I, Roger, send Benji to you, John, literally the second you receive it, you begin accruing interest on Benji.
That feels like something that's better than Zelle, simply because Zelle would just move cash around, but you don't get the interest moving on as well.
You have to take additional steps to integrate it into the capital markets and receive kind of the interest, which is so important.
for customers and clients.
And so in a construct, it's just a money market fund, but we did pioneer and chopped a lot of wood, spent a lot of money.
We're super persistent with the regulators to allow us to use blockchain infrastructure as the...
as the primary platform for our for the for the records for our transaction records.
It's not a digital twin.
It's not a shadow record keeping system that that ultimately, you know, tries to copy what the legacy transfer agency systems supply is actually a real online transfer agency process.
And that's what allows us to do these things.
Instant transferability, intraday yield features.
It's just upgraded what has been one of the most boring things on planet Earth, which is a U.S.
government money fund.
And brought it up into the new applications and new potential markets because of these instant transferability features and intraday yield characteristics that we've been able to bring about.
I'm really interested to hear how you frame this product in terms of differentiating it from a stablecoin or from a different digital asset like a Bitcoin or something else.
How do you think about that?
How do you articulate that to people who are trying to understand the differences between Benji and some of these other products?
Well, I think the easiest thing for us to be complementary or substitute for or used in conjunction with would be stablecoins.
And that's because the stablecoins just don't pay interest.
We do know that if you have stablecoins custodyed under certain arrangements, that the stablecoins operators have created distribution relationships with those operators.
And so you'll get something called a reward.
It's kind of a cute little way to not be.
categorized as a security by and large.
But if you look like a duck and act like a duck, you probably should be considered a duck.
And so we think of stablecoins as something that's new money, but the fact that they are not allowed to pay interest and currently at this current environment that may always change over time, it means that it...
kind of represents a dead asset unless the user is actually going out and putting it into some sort of DeFi protocol, lending it, and then receiving income for having lent it.
Well, those $7 trillion in money market funds, those actors by and large aren't really adept at putting their assets into a DeFi protocol.
They just want to earn the interest on the underlying T-bills that sit underneath the...
the tokenized money fund, the Benji construct.
And so it is a near term short, you know, is intended to be, you know, highly liquid where we are unpacking a lot of applications at the moment is in.
being used as collateral, especially in the crypto ecosystem by and large that have heretofore have used essentially stablecoins as their collateral for their complex and oftentimes, you know, complex and or derivative based type of trades.
And so what they're doing now is being able to find ways that they can substitute.
holding Benji in a construct, earning that yield, and then continue to be able to trade.
So it's really being woven into, in a number of places, sophisticated crypto investors who want that income, especially in the flat markets like we are now, if you can't make any money on the trade, but you can at least keep making money on your collateral.
And it's an important part of the economics of the trade.
So inside of collateral management, I mean, ultimately, I think we're going to see the regulators.
look at things like tokenized money funds, like Benji, to be used as settlement tokens themselves.
By and large, there's still some kind of wood to chop relative to that.
But the applications for money funds, this all goes back to nine years ago when we were beginning our journey here.
We knew that money funds had been in the transactional economy for a long period of time because one of the things that we pioneered at Franklin Templeton was doing check writing on money funds.
When's the last time you wrote a check, John?
No comment.
Exactly.
But debit card capabilities came on top of money funds as well.
And so they had been woven into the transactional economy being used as payments for a long period of time.
Well, now you come along, you put them on blockchain rails, they get tokenized.
And now all of a sudden, as soon as those payment ecosystems began to...
to migrate and update or get replaced by brand new operators, you know, who are focused on blockchain specifically, then you're going to find these things moving around quickly.
Like I said, just like fiat with the added advantage that you're getting that interest literally the second you begin holding it.
Roger, you said a moment ago that the money market funds is a $7 trillion investment universe right now.
There are enormous amounts of on-chain – or assets that are not on-chain that – like you said, there's been this nine-year journey that Franklin Temple has been on to pioneer digital assets and start to bring some of those assets on-chain.
What does that look like in terms of the progression from where we are today and towards some future state where a lot of these assets and markets have moved on-chain?
Where do you see that progression happening and what's that outlook?
for you?
Well, it's really interesting because we had a vision.
We had a vision that money funds could be far more useful coming on chain.
But that was just our proof of concept.
I mean, to build long-term wealth, you need to be taking risk.
You're not taking risk other than expecting that the US government is going to be paying the T-bills.
And if that's not going to occur, then I got news for you.
We have a lot more problems on planet Earth if that comes about.
But you need to take risk in your portfolios.
And so we have we've always had our sights set on where the rest of our thousands and thousands of investment services can become come on chain.
But really, it all starts with where are the wallets?
Right.
I mean, you're talking about a blockchain enabled product and strategy.
It needs to ride in a Web 3.0 digital wallet by and large.
Well, you know.
The our legacy customers and clients think of the Morgan Stanley's or the Merrill Lynch's of the world.
No digital wallet ecosystems inside of their infrastructures.
That will be something that they are creating.
We know that to be to be the case.
And they're beginning to build those things out over time.
But where the wallets had been is, you know, clearly either in the centralized exchanges themselves who have, you know, literally hundreds and millions of wallets.
but hadn't been in the securities business and hadn't really wanted to be aggressive and venturing into the securities business.
Except what has happened over the past year as crypto has been flat and TradFi assets have continued to rocket northward.
All of these exchanges now are sitting up and saying, hey, our users want this.
You know, they want to be making money instead of, you know, a flat performance.
And so they are rapidly.
tokenizing stocks.
As you know, you see the announcements time again from a lot of these platforms are doing that.
They're rapidly growing themselves into the securities business.
That's going to continue to put more pressure on kind of legacy financial services providers who have not yet built and integrated massive amounts of digital wall infrastructure into their client experience.
And so all of this thing is kind of really, quite frankly, propelling forward pretty quickly.
Currently, you have these these organizations in these exchanges, you know, doing more derivative exposures into stocks, you know, they're taking an SPV and they will, you know, put, put the, the, you know, stocks in the SPV and then you'll get a piece of the SPV, but it's really kind of a derivative experience on that as opposed to the actual stock.
But we just see the momentum and the infrastructure shifting so that, you know, eventually there will be public companies who are.
you know, issuing on chain specifically, as opposed to these other constructs, which will be important and which will allow these ecosystems to get their clients exposure, not just to crypto, but also to other asset classes.
But all of these things are just rapidly deploying and coming forward.
And so, gosh, it doesn't seem like it's a matter of if this is going to happen, but quite frankly, when.
And, you know, I think we feel pretty...
fortunate that nine years ago, we just began to just pilot and experiment in how we might be able to use a blockchain in order to give us an opportunity to be competitive and growing this experience for customers and clients.
Gotcha.
It's really helpful comments there.
Beyond just the Benji product, the money market fund, what are some things you guys are exploring at Franklin Templeton in the RWA or tokenization space that you're excited about, like expanding product offerings or just things that you're looking into right now that you think you're excited about?
Well, we're always – it's interesting, kind of the RWA, the permissionless world.
boosting from us, you know, I think we have a global brand name where, you know, we're a truly a global investment organization with expertise in a lot of things.
And what we've seen even without our involvement in any way, shape or form is people taking Franklin Templeton, you know, ETFs and, you know, tokenizing them by putting them into SPV structures and then allowing their customers and clients to access that.
That's kind of an interesting just.
phenomena that has come about without our really active participation in that.
What really anchored me inside of this all those years ago was this idea that blockchains may enable investors to expand their opportunity sets in general.
The number of things that could come into these record-keeping systems that heretofore had not been kind of put into the soup.
you know, the asset allocation that a customer or a client, whether they're large or small, had experienced, it seemed to me that it was highly likely that the blockchain could create, you know, more transparency, more validation of where really assets are so that they could be transferred and traded and brought into a broader investment experience.
For so long, investors have been kind of forced to go out the efficient frontier to seek more return and substitute, you know, something with more risk in their portfolio to achieve their return objectives.
And it's, you know, as I was thinking about that, I was like, well, first of all, that historical, you know, efficient frontier theory and hypothesis is all based on.
a two-dimensional world.
Well, none of us live in a two-dimensional world.
We all live in a multi-dimensional world.
Those dimensions keep growing.
And so rather than optimizing, have some sort of tangent to a curve, you know, on a plane, it's like, actually, it's more like an entire plane.
If you think of a 3D plane that we're optimizing across that plane of experiences.
And I think it's going to allow, blockchain is going to allow much more highly customized solutions for customers.
and clients, especially paired with what we've seen moving forward with kind of AI driven financial advice agents, so to speak.
People want to invest in things that are meaningful for them, not just have a financial outcome.
They want to invest in things like some people, my daughters want to invest in things that have impact.
Well, it seems to me that you're going to be able to optimize across not just risk and return, but some other characteristics or features that you're looking for, by and large.
And so that's what anchored me into the possibilities, is that there's going to be more types of fungible assets that can be woven into your portfolio experience.
And that those portfolios are going to be highly customized, not just like cookie cutter, like the target date funds.
And we're going to group, you know, 10 million people into this one target date fund.
They're going to be highly customizable to what you, John, want in your portfolio and for your family.
And as your life changes and your life circumstances change so that your portfolio can tilt and change over time.
It's actually, you know, I've been, as you pointed out, I've been.
at this for a long time now almost 40 years i've been in asset management but it's never been a more exciting time i think to create great solutions for customers and clients based on these technologies that are coming forward everyone's tokenizing stocks these days but almost nobody's doing it right thin liquidity prices that drift from the real thing dividends that just vanish bit get stocks 2.0 is different real NASDAQ and New York Stock Exchange depth through licensed brokers.
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That is really exciting, Roger.
And I think a question a lot of people have right now is they see this potential, they see all these possibilities, but...
We also have a lot of hurdles between where we are today and getting to that future world.
What are some of the biggest hurdles that you see?
And this could be anything from like technical changes, regulatory approval, you know, like a cultural thing, like a vibe change around crypto and digital assets overall.
What do you think has to change?
What obstacles have to be overcome to get towards that future and unlock this potential and possibility?
I think there's several of those things that you're speaking about.
There's always...
The regulatory construct always seems to kind of lag the rapidly changing technology.
The technologies themselves can need to continue to evolve so that there's interoperability, so that we're not talking about chain A versus chain B versus chain C.
I mean, we get calls from, quite frankly, very large, massive financial institutions who are like, well, we want to do business with you, but we want you to develop on our new chain.
that we're bringing about.
And you're like, you know, so we're never going to see a reduction in the number of chains that are coming forward, but they're going to need to have to interoperate, quite frankly.
That's kind of a technological thing.
I also think that if people just begin to understand that, you know, I mean, we began to understand a long time ago that crypto itself is a medium of exchange, that the different blockchains are what we would call digital nation states.
They have their own GDP and that GDP could grow significantly depending on how the chain is organized and what its characteristics might be and how rapidly they penetrate into different parts of the economy.
But it's just the cryptos that is the transmission mechanism that allows value to be transferred inside of that chain.
The chains themselves are utilities.
The more people begin to understand the utility part of the chain.
just like I could go back on the wall here and turn on these lights above me, that you need these utilities to operate for the information-based businesses moving forward.
The more understanding of that is, I think you're going to get more adoption.
It's kind of like a little bit akin to, I remember all those years ago, there was a pretty famous stock picker that worked at Fidelity called Peter Lynch.
And it's like, you know, He was wearing Nike shoes.
Oh, ergo, maybe I want to own Nike stock.
Or like Warren Buffett loved to eat the Dairy Queen little dip cone situation.
Well, if he liked the product, he wanted to buy Dairy Queen.
It's not too much different than that.
If you find application within your business for these underlying ecosystems, you're naturally going to be more, okay, yeah, I get how that works.
I know I'm using these products and services.
Ergo, I would likely invest or actually, you know, in the case of asset managers, advise others to invest in these ecosystems.
So I think a lot of that is kind of spilling forward.
And, you know, a lot of the industry events I go to now, you know, they've replaced, you know, the young hoodie wearing, you know, not shaven young male with, quite frankly, a lot of gray haired old wisdom.
people who have built things, those are the prevalent.
And that's probably a telltale sign that adoption rates are coming forward in a more aggressive way.
Clearly, the undoing of the freeze rate at the beginning of last year on regulations in the US allowed a lot of things that were in skunk works in the US-based financial institutions to begin to push forward and move forward in these things that we've already been talking about.
So I think it's, quite frankly, full steam ahead.
Roger, as an unshaven young male, I'm always happy to see some gray hairs at these events.
So you're always welcome anytime.
But I do want to ask you a question about this.
You've talked a lot about the infrastructure and the opportunity, the potential of that technology as technology, but there's also investment assets here.
And Franklin Templeton offers ETPs for Bitcoin, for Ethereum.
How do you talk to investors about thinking about an allocation to the assets themselves?
What role does that play in a portfolio?
And just how do you go about thinking about that and communicating about it?
Well, always getting investors' attention, first of all, is the most.
you know, difficult thing, especially when, you know, there's, you know, headlines about, you know, literally stocks rocketing, you know, northward in their IPOs.
So, you know, there's those components of about, and in our practice and experience of Franco Templeton has been to work with.
wealth managers and wealth platforms and financial advisors who are the front lines of helping customers and clients.
And, you know, for years now, we've been saying, hey, these are important ecosystems.
Again, just like, you know, 100 years ago, you would have been buying a utility stock because, you know, we were electrifying, you know, the world.
Same sort of stuff, you know, getting a toehold into these type of things.
You know, unfortunately, the volatility, obviously.
can be frightening, but we think the volatility over time as more actors become involved, you know, dampens and crypto as an asset class begins to look a lot like other asset classes.
once the momentum investors have kind of shifted away and moved away from it.
But it's all about, again, talking about infrastructure stories in our minds.
It's not about, oh, here's a certain crypto that's going to go higher because the following five people are saying it's going to go higher.
This is where they are finding applications in the real world and are growing their digital nation state.
And as the digital nation state grows and the GDP, you can participate in that by owning a crypto that is, you know.
that represents what value of GDP in that digital nation state is.
It can be a complex conversation.
There's certainly far, there's some of our far earlier adopters.
It certainly helps when, you know, assets are appreciating versus, you know, flat or depreciating.
But like lots of things in life, it's about persistence.
It's about being disciplined and walking, you know, not necessarily be involved in just the transactional day trading, but, you know, finding.
thematic reasons for anchoring in into these portfolios.
We tried to make things quite frankly easy.
You notice that that's kind of the front side of our ETFs are easy.
We're trying to make diversified portfolio crypto investing easy peasy.
You know, that's our diversified product.
So we use a lot of different kind of conversations to talk to customers and clients to continue to anchor for them.
And the number of conversations that we have continue to increase.
Of course, there's a lot of distraction that is happening because of the AI boom and the IPOs that are happening inside of the AI space.
But, you know, it's a journey that we're dedicated to, as you pointed out.
Franklin Crypto has been specifically organized to.
to meet customers and clients with high quality products and services.
And so that's where we'll continue.
Roger, very helpful on that.
I wanted to ask you about investor objections, because I feel like there are still a lot of investors who just won't touch crypto.
A lot of people are very hostile towards the whole asset class.
What are some of the biggest objections that you're still hearing from investors about the digital asset class?
And how do you go about addressing those objections?
Well, I think most of those objections come from people who are not informed by and large.
And that's not a criticism by and large.
People like to stay in their lanes.
They know what they know.
A lot of people have become widely successful in implementing and advising on things that they know about.
But what we see, this has been a journey that Franklin Temple has been on for lots of years now, the growth of private markets by and large, things outside of organized public markets.
We've been about 40 years in asset management about the expansion of private markets.
And I think crypto things related continue to unfold those.
And so I don't really pay a bunch of attention to people who don't know.
I mostly like to spend time and attention with people who are inquisitive and trying to uncover things.
Here's an application that we're seeing for digital.
blockchain technology that helps expand the opportunity set for those who are paying attention, by the way.
Banks.
Banks do a lot of really super interesting things.
They make a lot of money.
They have licenses.
quite frankly, print money.
They have a number of different products and services that they offer.
I think blockchain threatens them because they are intermediary so many times.
And blockchain is a really effective disintermediary.
If you and I have the same exact record set, we don't have to go through the latency and the time delay and reconciling the last, you know, one half of a percent of that data set.
And then, you know, A financial institution keeps your money during that reconciliation process and earns money on that.
That's why it threatens them.
But where the opportunities unfold for banks, I think, is kind of, and pardon this for being a little bit longer story, but about 30 years ago, banks figured out that it was that, you know, they're in the business of lending money, originating a loan to an entity.
They began to figure out that they didn't need to be able to balance sheet that whole loan themselves, that they may be able to find other investors that they could parse that loan into pieces.
And there'd be a number of people who would own that loan after it was originated.
That is called the syndicated bank loan market.
today and it's really robust.
It's a big giant market that makes a lot of money for the banks.
But I think what's going to happen with blockchain technology is there's going to be more things.
There's going to be more products and services that banks do in origination that they're going to be able to, by integrating blockchain into their infrastructures, they're going to be able to syndicate a lot more types of loans.
that herefore they have not done before.
Something like trade finance, for example.
Trade finance is a massive market.
$25 to $30 trillion worth of trade finance occurs at any given time around planet Earth.
And this is just somebody having a product.
They have to deliver it to somebody who is not geographically close to them.
They don't get paid until that product is actually delivered.
And so there's a cost of capital for them that's held.
that they can't use.
And so they go to a bank and they get a trade financing at big expensive rates in order to bridge that time period.
Well, these are things that if the underlying infrastructure of these financial institutions become more blockchain based, they're going to be effectively in allowing other investors to be able to invest in trade finance.
Banks, I think, by using blockchain to improve their collateral processes.
by and large, and that's all that a bank does, right?
They lend to you and I and the businesses based on some sort of form of collateral.
And once they can achieve far more efficiency in their collateral management processes using blockchain, they actually will likely be able to lend more, do more of their core business of doing more lending.
and in turn be able to unlock a whole array of new products and services that investors can tap into the overall portfolio that heretofore have been in the private realm of the bank to make money.
And so this is just a prime example, you know, blockchain, this crypto that we don't believe in that.
But if the infrastructure is beginning to penetrate this, what's going to happen is we're going to grow investment opportunities for people.
And those who are paying attention and who are, you know, have more of an open, creative mindset to build solutions for the long term.
Those are the customers and clients, I think, that are really going to be important for asset managers to hold in the long term, not those that don't want to explore new things.
We know the world is an ever-changing thing.
The type of investment opportunities are ever-changing.
And we want to be able to deliver the best outcomes for customers and clients based on those.
So rather than having your head in the sand and ignore things, you have to have a spirit of innovation and exploration.
We're in the business of taking risk for clients, not reducing risk for them.
We want to take measured risk.
By and large, we don't want to take, you know, we're not speculating for clients.
But if we're in the business of taking risks, then we're going to need to keep unpacking technologies and opportunities that come forward, including blockchain, to be able to create better outcomes for customers and clients, quite frankly.
The changing, the underpinning of these legacy, you know, technology institutions.
And by the way, you know.
Companies like Morgan Stanley and J.P.
Morgan and Goldman Sachs, I mean, their technology budgets are like in the tens of billions of dollars.
Right.
And so sometimes they're going to have reticence because they spend multiple tens of billions of dollars a year on these legacy infrastructures.
There's going to be reticence from some of those actors inside of those things.
Well, why should we be doing this?
What can we do?
But.
But, you know, that changes over time.
And, you know, these type of things, if they can improve the profitability in some way or do more business, prove out that the enterprise can do more business, then that's why we do it.
I mentioned $7 trillion is the U.S.
money fund kind of industry.
But things about using Benji.
and smart contracts around it to replace things that have heretofore been in the banking industry, we see them and or begin to be integrated into the payment ecosystems in a larger way.
That $7 trillion quickly takes a...
five, six, seven X onto it and becomes a huge, massive business opportunity.
That's why we've been anchored in and been really persistent about it in the long term, because that's a big, big, big business.
If you're able to be one of the winners of that business over time, it's rare that you find periods of time where technology comes and shifts things just a little bit that opens up a massive new market for you.
But that's kind of where our sights are set.
Roger, I really appreciate you taking the time to lay all that out for us and just share that specific example, robust example of how much capacity there is to unlock new ways to bring things to market, new products, new services that a lot of people are just not aware of if they're just an ordinary average digital asset investor.
So that perspective and context is really helpful.
Thank you for that.
You talked about innovation and embracing these changes.
One of the things that a lot of people are concerned about is, you know, there was this big quantum fear earlier this year.
Now, a lot of people are worried about agentic attacks, agent swarms, AI being able to break encryption and sort of like, you know, pose some risks to this industry.
How are you thinking about that?
Are you more excited about the potential unlocks that AI is going to bring to digital assets or do you view it as a risk, a threat to protect against?
How are you framing this in the conversations that you're having and what are your thoughts on that?
A couple of comments on that.
Number one, our entire business is based on trust.
You know, it's you, John, sending money to us at Franklin Templeton, you know, through one of our partners or, you know, advisors that works with us because you trust that your money is going to be there, that it's going to grow, that's going to meet your objective.
The entire business is based on trust and trust alone.
When we build technology.
in this space, we often refer to it not as software, but as trustware for this very same reason.
We think the blockchain infrastructures improve trustware, quite frankly, versus the legacy.
This has been, you know, bad actors coming and stealing money as long as assets have moved from a, quite frankly, a bearer instrument technology.
You know, 85 years ago, we would have handed you a piece of paper and said, hopefully you have this giant fire safe in your home that you're storing these things in, or you're partnering with a custodian that has a massive vault, you know, that protects these type of things.
As things have become digitized over time, this, this, this.
concern that you're highlighting has continued to raise.
I think we're going to continue to meet the challenges with new technologies that offset the emergence of other technologies.
This has been a pattern, quite frankly, that's existed for decades in the financial system and industry.
And I have confidence that we will bring those together.
It does point out, though, that there's some big picture things.
that you have to be a tender to.
And that is all the years ago when we were talking with the SEC and other global regulators about approving us to have these capabilities of using blockchains as the system of record, these ecosystems.
And it became apparent that just because you can do something, should you do it?
Is it kind of another construct?
You don't have to go back, give the history lessons again.
The global financial crisis, when it unfolded now almost 20 years ago, It took weeks and months for the investing public to become concerned about the counterparty risk of certain institutions and is my money safe and is it going to be there?
And so we went through that tumultuous period of putting companies together and the U.S.
government basically putting a guaranteed stamp on a whole bunch of these different financial institutions that they would live another day.
And that's because the lifeblood.
in the economy is a sound financial system by and large.
Well, it was only a couple of years ago when a couple of financial institutions like First Republic and Silicon Valley Bank went under in a matter of a weekend.
The velocity of activity.
I spoke earlier in our conversation about how it's taking a money fund.
and making it act like fiat US dollars and moving just as quickly as fiat dollars do, you're increasing the velocity of money, you're increasing the velocity of activity.
And so while there's a lot of positive benefits from increasing this velocity, there's no doubt going to be negative externalities that also may unfold because of this velocity of activities.
And so I would expect, unfortunately, the regulators don't come in until usually there's a mess that needs to be cleaned up in some way, shape or form.
But what we have done here with blockchain versus the global financial crisis, we've increased interconnectivity.
We have increased contagion risk in some way, shape or form.
But yet at the same time, we've also improved the system to have more safeguards and stop gaps.
I talked about collateral management.
We should be able to implement multiple times a day that collateral could be checked and improved rather than, you know.
once a day or maybe at the end of the weekend in the case.
So we're improving these things, but we're going to have to interlayer them and we're going to have to be smart because the whole industry is based on trust, by and large.
You talked about where's the adoption for institutional investors and others.
They have to be able to trust the ecosystem, by and large, and that they're not being played or it's not being manipulated by somebody else to somebody else's benefit, but it's a place that they can store their assets and their wealth for their long term purposes.
That may be a little bit of a pivoted number, a number of different things there.
But I think I captured many things with that answer that you were asking.
I think you covered a lot of waterfront with that.
Roger Basin, head of digital assets at Franklin Templeton.
Thank you so much for being on the Milk Road Show.
Where can we send people to find more of you and your work online?
Just come to FranklinTempleton.com.
You'll find our stuff on digital assets.
Roger, I really appreciate the conversation.
I hope we can have you back again soon.
Thanks, John.
Thank you all for joining us.
I hope you all learned something today.
So until next time, as I always say, stay safe, stay educated, stay bullish, and we will see you on the next episode of The Milk Road Show.
Thanks for being here, everyone.
Bye.
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