Franklin Crypto Sees Institutional Shift as Tokenization and CLARITY Act Drive Growth

Franklin Crypto President Sandy Kaul Ginns believes the gap between crypto market prices and underlying fundamentals is creating a compelling opportunity for institutional investors, even as digital asset markets remain under pressure.

Speaking with CoinDesk's Jennifer Sanasie on Public Keys, Ginns said Franklin Crypto is focused on building a leading fundamental crypto investment platform after Franklin Templeton acquired 250 Digital, the investment firm that emerged from CoinFund's liquid investment business.

According to Ginns, while venture capital continues to play an important role for institutional investors, liquid crypto strategies are becoming increasingly attractive as adoption accelerates across the financial sector. He argued that institutional participation is expanding despite weak market sentiment because the industry's long-term fundamentals remain strong.

Ginns highlighted the growing convergence of traditional finance and blockchain technology as a major driver of future growth. He pointed to Robinhood's blockchain initiative as an example of traditional financial distribution moving onto crypto infrastructure, creating new opportunities for developers, investors and users. He also cited the rapid rise of tokenized money market funds, which allow investors to earn yield while maintaining the flexibility of on-chain assets.

He added that tokenized equities, stablecoins and broader blockchain-based financial infrastructure are helping bridge the gap between traditional finance and digital assets, paving the way for greater institutional adoption.

Ginns also said regulatory clarity could become the next major catalyst for crypto markets. He noted that the Senate's upcoming vote on the CLARITY Act may provide institutions with clearer rules governing digital assets, potentially encouraging additional capital inflows.

Beyond regulation, Ginns expects crypto projects to place greater emphasis on improving token economics. He pointed to Hyperliquid's revenue-backed token buyback model as an example of stronger value accrual supporting both project fundamentals and token performance.

Looking ahead, Ginns believes established blockchain projects such as Uniswap, Aave and Chainlink could regain investor interest by enhancing value capture for token holders. He also highlighted Stellar's increasing focus on institutional partnerships as another development worth monitoring as traditional finance and crypto continue to converge.