From Vaults to Wallets: Three Things Banks and Asset Managers Can No Longer Avoid

Transcript

Our events at the Crypto Valley Association, which we organize, are always running with distinguished partners, but we always have someone taking the biggest chunk in support when it comes to bringing these events to life. And this year, we've been working together and we will be working together with a very important company here with Franklin Temperton. And it's here to be said that Franklin Templeton has been very active, supportive and leading by expertise in this field. Not just in Switzerland, but for this event, it's what most relevant is that in Switzerland, their footprint

is unavoidable. They're leading by the tech and the business and the economic expertise which they line up to become the leading entity in asset management when it comes to digital assets. And nobody else would be better person to speak to you about this and lead through his thoughts than Christian Leia, the head of Switzerland from Franklin Templeton. Christian, would you mind please coming on stage? Please put your hands together for our presenting partner Franklin Templeton and Christian.

>> Thank you, Benedict. Good morning. So, um before I start this, I just want to say what a great pleasure it is to be here and to be supporting the symposium and to be in Zurich. I think that's a very important fact. Franklin Templeton's been around since 1947. So next year that will make 80 years. We've been in Switzerland since well for 29 years. So next year it'll be 30 years. And I think it's safe to say that we've spent the majority of our time um as an asset manager firmly in the

traditional finance world. So, it may be a bit of a surprise for you that I'm standing here today speaking on behalf of Franklin Templeton. And I hope that in the next few minutes you'll understand why. Let me see if I can make this work. Here we go. Does anyone know when containers were introduced as a shipping standard? I didn't know. So let's just keep that in mind for a second. I'll res I'll resolve the question later and let me maybe start with a sentence that may well divide the room a little bit.

Web three is not threatening banks and asset managers. It's exposing them. Us I should say exposing whether we truly understand why we exist. once control, opacity, and friction disappear. So let's start with a little bit of a short story and go back to that image in the 1950s. And that is the answer.

Global trade didn't change be because ships all of a sudden got faster. It changed because of something profoundly boring. the shipping container, the standardized box that you know so well from all the pictures or if you've been to one of the big ports in the world like Hong Kong. Before containers, ports were messy. They were full of workers, paperwork, delays, intermediaries, different size boxes, bags, and what have you.

And after containers, all of a sudden everything was standardized. Goods moved seamlessly and entire professions disappeared. Shipping companies didn't fail because trade stopped. They failed because the infrastructure stopped needing them in the same way. Blockchain is the containerization of finance.

And just like back then, the question really isn't whether finance continues. It's who still earns the right to sit at the table. So today, I want to talk about three things. Not going to talk about trends or predictions, but really three, in my opinion, unavoidable realities. First, the rails are changing and infrastructure always wins. Secondly, wallets don't just change technology, they trigger a purpose crisis.

And then third, I hope to show you what Franklin Templeton does and how it shows what serious looks like. So, let's start with the actual thing that's happening. This is not a crypto cycle. It's not an asset class debate and it's certainly not a generational fat. And I think we all know that and that's why we're here. This is a rewrite of financial infrastructure and history is quite clear about one thing. When the rails change, power changes.

Or as our CEO and fearless leader Jenny Johnson has essentially framed it, blockchain isn't a product story. It's the next operating system for financial services. And operating systems don't compete with products. They define what products are possible. Tokenization effectively collapses issuance, ownership, custody, transfer, settlement, recordeping, all into a single programmable layer. And that's not incremental efficiency. This is value

chain compression at the core. And whenever value chains compress, banks and asset managers, all of us face a moment that we cannot delegate. Explain why we still deserve to exist. So let's move from infrastructure to consequence because the most destabilizing innovation in the entire stack is not DeFi per se. It's the wallet.

A wallet's not a channel. It's not a feature. It's not some crypto curiosity. A wallet is a new financial center of gravity because a wallet combines identity, ownership, permissions, compliance, logic, distribution into one single object. And in a wallet native world, clients no longer live inside our platforms. We compete to earn a place inside theirs.

We compete to earn a place inside theirs. And that single inversion quietly dismantles decades of institutional muscle memory. For years, we've relied on, I'm going to be a little bit provocative here, opacity. disguise that expertise, friction disguise that safety and control disguises trust. Wallets remove all of that.

And when friction disappears, only purpose remains. Which leads to the question many institutions have postponed for far too long. If clients control assets directly, move them instantly, and see everything transparently, what exactly are we for? There's no legacy answer to that question. So, let's leave theory behind. Let's go to my third point because I think the future is already operating in plain sight.

Franklin Templeton did not respond to tokenization with a PowerPoint presentation some sandbox of vision deck. We moved into production. So I'm going to talk about Benji. We launched We launched Benji, the Franklin onchain US money market fund some years back in the United States as an SEC registered fund as well as in Luxembourg where it's governed by the CSSF.

Benji is deliberately boring. It's a real money market fund. It's on public rails. It's regulated. It's compliant. It gives you intraday yield acrruel, 247 settlement, and atomic ownership transfer. It's not a hype. It's not some idea, some ideology, and it's not a pilot program. It just states something slightly more unsettling.

This already works. That's what it says. You earn yield the moment capital arrives. Liquidity doesn't wait for batch cycles and settlement doesn't sleep. So for us asset managers and not just us but everyone that should reframe how we think about cash liquidity and operational alpha. But Benji is no isolated case. We didn't stop at issuance. We moved into distribution and liquidity where the real power sits.

It's been widely advertised. So, let me mention it. Our collaboration with Binance made institutional grade money market exposure available in a crypto native environment and that is really important because it signals something quite fundamental. This is not TreadFi waiting for clients to come back. This is asset management meeting capital where it already lives natively at scale. So you know we didn't have philosophical debates about whether that partnership or right is right or wrong. We did it execution.

And then something even more revealing happened. We were selected to support reserve management for the state of Wyoming's stable token initiative under the Wyoming stable token commission. So what does that mean? A US state issuing a stable coin entrusting reserve management to a global asset manager. So at that point it's really no longer about innovation. It's about institutional trust migrating to new infrastructure.

This is the sorting mechanism taken together. These actions say something quite clear. We're not experimenting with web 3. We're anchoring core asset management functions, issuance, yield, liquidity, reserve stewardship to new rails. And that's why, as my esteemed colleague Sandy Call has warned in different words, tokenization doesn't eliminate intermediaries.

It eliminates those who can't articulate their value. That sentence should make all of us equally uncomfortable because it's not ideological, it's operational. So what actually survives in a wallet native tokenized world only a small set of institutional advantages remain defensible stewardship guiding clients through complex complexity responsibly.

Judgment knowing which risks not to take. governance, credibility under scrutiny, risk intelligence, understanding second and third order effects, outcome delivery, not products, not promises, but outcomes. This is the new purpose of banks and asset managers. It's not control, it's credibility. And if you remember nothing else, remember one thing.

When shipping containers arrived, trade didn't stop. But only those who adapted to the new rails stayed in the middle. The future of finance won't belong to the institutions that moved fastest, but to those that remember why they exist when control is gone. Thank you.