Franklin Templeton CEO, Jenny Johnson, predicted in a Jan. 21 interview with Bloomberg that Trump will begin working towards clearer digital asset regulation in the US by integrating the traditional finance (TradFi) space with the digital asset sector.
“I think that the thing with the Trump Administration is we’re going to see them converge more, the TradeFi and the crypto, which is something that we need,” Johnson said during the interview.
Crypto could revamp the finance industry
Johnson then discussed the potential for blockchain technology to revamp the financial industry as well as address challenges that have gone unnoticed for several years. She went on to predict that ETFs (exchange-traded funds) and mutual funds will “ultimately” be the next big products that will be built on top of distributed ledger technology.
“I do think that it’s likely that ETFs and mutual funds will ultimately be built on blockchain just because it’s an incredibly efficient technology”.
Johnson calls for crypto clarity under Trump
In order for blockchain and crypto to address issues in the TradFi sector, Johnson stressed that a clear regulatory framework first needs to be developed to facilitate integration of the crypto and traditional finance sectors, saying, “We need to have some sort of regulatory clarity so that you could bring these together because, fundamentally, it will drive out costs.” She added that there is “great innovation that the technology enables”.
The new Trump administration, which took office on Jan. 20, has yet to address crypto-related policies and regulatory challenges. Throughout his political campaigns, Trump predicted a sustainable and secure future for digital assets. This is the main reason analysts and crypto experts expect the President to review the current crypto regulatory framework in the US and propose initiatives that favor both the digital asset and financial sectors.
Although Johnson is positive about the long-term potential of blockchain and cryptocurrencies, she compared the technologies to the late 1990s and early 2000s dot-com boom.
“It’ll be a little bit like the dot-com era, eventually, you had some of the biggest companies of the next decade that came out of it, and then you had a lot that kind of blew away to the side. I think that the crypto world is similar,” Johnson added.
The dot-com bubble peaked at $2.95 trillion in 2000 and eventually burst when speculative investments dried up. Despite the slump, companies such as Amazon and Google have emerged as digital economy leaders.
Industry analysts believe that the current US government could become the most pro-crypto in history, especially under Trump. With a strong belief in innovation and a legal environment designed to encourage responsible growth, the convergence of crypto and TradFI has the potential to reshape the global financial world.
