Franklin Templeton and SBI Holdings are collaborating to launch a new firm focused on managing digital assets, aiming to capitalize on Japan’s anticipated approval of cryptocurrency exchange-traded funds (ETFs). SBI Holdings will hold a 51% stake in the venture, with Franklin Templeton controlling the remaining 49%.
Franklin Templeton, traditionally known for its expertise in stocks and bonds, has been actively expanding into the crypto sector. The firm was among the first to venture into spot bitcoin ETFs following approval from the U.S. Securities and Exchange Commission earlier this year.
These ETFs have been highly successful, attracting over $16 billion in investments within six months. While Japan has yet to approve crypto ETFs, countries like the U.S., Canada, Brazil, Hong Kong, and Australia have embraced them. The new company plans to introduce crypto ETF products in Japan once regulatory approval is secured. Recently, the U.S. market witnessed the launch of Ethereum ETFs.
Why ETFs are significant
ETFs offer a simpler way for retail investors to access cryptocurrencies. Unlike traditional cryptocurrencies that require specialized exchanges and private keys, ETFs can be traded through standard brokerage accounts. This accessibility makes ETFs appealing to retail investors who wish to invest in cryptocurrencies without dealing with the complexities of digital wallets.
The focus is not only on ETFs but also on exploring digital asset securities. These securities involve tokenization, which uses blockchain technology to create tradable tokens representing ownership in real estate or government bonds. Boston Consulting Group and ADDX forecasts show that the asset tokenization market could grow to $16.1 trillion by 2030.
SBI Holdings has been actively expanding its portfolio of alternative investments. The company has entered into several international partnerships to diversify its offerings. Domestically, SBI Securities, Japan’s largest online brokerage, has also been proactive. In July 2023, they established a wealth management office to attract more affluent clients.
Statements from leadership
Jenny Johnson, President and CEO of Franklin Templeton, highlighted the strategic alignment between the two firms. She noted that the extensive reach of SBI’s brand among younger audiences in Japan complements Franklin Templeton’s commitment to providing future-focused investment solutions. This partnership aims to democratize access to advanced financial tools, particularly for young investors.
The collaboration between Franklin Templeton and SBI Holdings represents a significant step toward integrating digital assets into mainstream investment portfolios. By combining Franklin Templeton’s expertise in asset management with SBI Holdings’ extensive reach and market presence, the new firm is poised to play a pivotal role in the evolving landscape of digital asset investments in Japan.