Global Financial Giants Franklin Templeton and Citigroup Embrace Solana Blockchain
Franklin Templeton, a major asset manager with $1.4 trillion under management, and Wall Street heavyweight Citigroup have announced plans to utilize the Solana blockchain for their upcoming financial services. The announcements were made at the Solana Breakpoint 2024 event in Singapore on Sept. 20, signaling a rising interest in decentralized finance (DeFi) among traditional financial institutions.
Franklin Templeton intends to launch a mutual fund directly on Solana, while Citigroup is exploring Solana’s potential for smart contracts and cross-border payments. Both companies cited Solana’s low transaction costs and high transaction capacity as reasons for their decision.
Franklin Templeton’s Blockchain Move
Franklin Templeton’s decision to introduce a mutual fund on the Solana blockchain underscores its ongoing push into blockchain technology. Mike Reed, Franklin Templeton’s partnership development lead, explained that Solana’s cost efficiency and scalability made it the right fit for this initiative. He emphasized that blockchain is key for operational efficiency and cost reduction in financial services.
The mutual fund will operate natively on Solana, solidifying Franklin Templeton’s leadership in blockchain-based finance. The company has praised Solana’s resilience and potential in a recent report, adding that despite blockchain risks, Solana is well-positioned for DeFi’s future. This move builds on Franklin Templeton’s existing crypto activities, as it manages spot ETFs for Bitcoin and Ethereum on the CBOE.
Citibank’s Focus on Cross-Border Payments
Citigroup is also looking into Solana’s capabilities for facilitating cross-border money transfers and deploying smart contracts. Representatives at the event stated that the bank views blockchain as the future of finance. Citibank has prior blockchain experience, having used the Avalanche blockchain for tokenizing private equity funds earlier this year. Solana’s speed and scalability make it an attractive option for Citigroup’s continued exploration of blockchain applications.
These moves by Franklin Templeton and Citigroup highlight a growing trend of blockchain adoption among major financial firms. Solana’s ability to handle high transaction volumes at low costs is drawing interest from companies aiming to improve operational efficiency. However, regulatory challenges remain, with the SEC still hesitant to approve a Solana-based ETF, with approval odds currently estimated at just 3%.