Franklin Templeton, a global asset manager with $1.3 trillion in AUM, announced plans to launch a mutual fund natively on the Solana blockchain during the Solana Breakpoint 2024 event in Singapore.
This move highlights the increasing interest from traditional finance (TradFi) firms in blockchain technology, particularly in decentralized finance (DeFi).
Franklin Templeton Plans Mutual Fund on Solana
Mike Reed, Franklin Templeton’s partnership development lead, shared the firm’s plans, emphasizing the appeal of blockchain for financial services providers. He pointed out that blockchain enhances efficiency and lowers costs, key factors for the asset manager as it aims to improve operational processes.
Franklin Templeton’s interest in money markets aligns with blockchain’s capabilities, particularly its ability to support a transactional economy and handle high transaction volumes efficiently.
“We want to have as many ledger entries as we possibly could,” Reed said.
Read more: How to Buy Solana (SOL) and Everything You Need To Know
Reed also outlined how blockchain technology plays an important role in Franklin Templeton’s digital wallet infrastructure and its on-chain transfer agent, laying the groundwork for the mutual fund to operate natively on blockchain.
Notably, Franklin Templeton is already a key player in the cryptocurrency space as one of the issuers of both Bitcoin and Ethereum spot ETFs. The firm provides institutional investors access to BTC and ETH through its ETFs, EZBC and EZET, which are listed on the Chicago Board Options Exchange (CBOE).
This is not the first time Franklin Templeton has favored Solana. In May, the asset manager suggested that Solana could power the next wave of crypto innovation.
The report, titled “Solana’s Accelerated Adoption,” highlighted the network’s resilience, technological strengths, and growth potential. Nevertheless, it also disclosed risks inherent in crypto and blockchain investments.
Citi Bank Also Eyes Solana
Citibank, the fourth-largest bank in the US, is also exploring Solana’s potential. The firm is reportedly looking to utilize blockchain technology for seamless money transfers and advanced smart contracts in the future.
Acknowledging the place of blockchain in the future of finance, Citibank said they would soon use the Solana network for money transfers and smart contract services. This, in their opinion, would help boost their financial services.
Some community members remain skeptical about whether Citibank’s plans will materialize, citing weaknesses in the Solana network.
“I will switch all of my cryptocurrencies for SOL if this ever materializes. Does anyone really think the major bank will utilize tech that is still in beta mode, hasn’t managed to be up for the full year, had 12 major downtimes in its 5yrs existence, which tx’s can be rolled back, has no instant finality, consistently lies about every conceivable metric, etc., etc. ‘Exploring’ and ‘potential’ are now replacing the ‘probabilistic deterministic’ narrative to distract from the real problems the Solana team has,” one X user wrote.
Notwithstanding, these developments reflect progressive recognition of the Solana blockchain among traditional finance players. Still, the optimism does not appeal to the US Securities and Exchange Commission (SEC), which continues to backtrack a Solana ETF. As BeInCrypto reported, the odds have since shrunk to 3%.
Read More: Solana ETF Explained: What It Is and How It Works
Solana’s native token, SOL, has been up by over 7% since the Friday session began. According to BeInCrypto data, it is trading for $150.69 as of this writing.
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