Franklin Templeton and SBI to launch a crypto ETF management firm

Franklin Templeton and SBI Holdings are joining forces to create a new company focused on managing digital assets. They want to get a head start on Japan’s approval of cryptocurrency exchange-traded funds (ETFs).

SBI will have the majority stake at 51%, while Franklin Templeton will hold the remaining 49%. 

Franklin Templeton, which has traditionally dealt with stocks and bonds, has been making strides in the crypto industry recently. 

They were among the first to jump into spot bitcoin ETFs after getting the green light from the U.S. Securities and Exchange Commission earlier this year. 

These ETFs have seen a massive influx, attracting over $16 billion in just six months. While Japan hasn’t given the go-ahead for crypto ETFs yet, countries like the U.S., Canada, Brazil, Hong Kong, and Australia are already on board. 

The new company plans to launch crypto ETF products in Japan as soon as they get the regulatory nod. Just recently, America saw the start of trading for Ethereum ETFs.

Why are ETFs a big deal?

Unlike traditional cryptocurrencies that require special exchanges and private keys, ETFs can be traded through regular brokerage accounts. 

This ease of access is a big draw for retail investors who want to dip their toes into the crypto waters without the hassle of managing digital wallets.

This is also about exploring digital asset securities. These securities involve tokenization, which uses blockchain technology to create tradable tokens representing ownership in assets like real estate or government bonds. 

According to forecasts by Boston Consulting Group and ADDX, asset tokenization market could balloon to $16.1 trillion by 2030.

SBI Holdings has been actively expanding its portfolio of alternative investments. The company has struck several international partnerships to broaden its range of offerings.

On the home front, SBI Securities, Japan’s largest online brokerage, has also been busy. In July 2023, they set up a wealth management office planning to attract more affluent clients. Jenny Johnson, the President and CEO of Franklin Templeton, said that: 

“The extensive reach of SBI’s iconic brand amongst younger audiences in Japan aligns well with our commitment to help this new generation of investors achieve their goals through our future-focused investment solutions.”

This partnership is seen as a way to democratize access to advanced financial tools, especially for young investors.