The best crypto investment approach, according to Franklin Templeton’s CEO, focuses on the infrastructure behind digital assets rather than on the assets themselves. Speaking at the SALT conference in Jackson Hole, Wyoming, Jenny Johnson highlighted what she considers the most promising sectors of blockchain technology.

Why Bitcoin Isn’t the Key Focus

While acknowledging bitcoin (BTC) as a form of “fear currency” often used in nations with unstable economic conditions or government-imposed capital controls, Johnson believes it draws attention away from the real innovation in the space. In her words, bitcoin is “the greatest distraction for one of the greatest disruptions that is coming to financial services.”

The Power Behind the Scenes: Blockchain Infrastructure

Johnson advocates investing in the technologies that underpin the crypto economy – from blockchain networks to validator services and decentralized systems. These systems, she explains, are like the “picks and shovels” — tools that support massive growth potential across economies. “The picks and shovels are the baseline of the strong, layered apps,” she said. Johnson specifically emphasized blockchain rails as a prime entry point for innovation, followed by promising consumer-facing applications built atop those rails.

Moreover, Johnson sees validators — the nodes responsible for confirming transactions on blockchain networks — as vital to increasing transparency in financial markets. “Just imagine seeing on public equity all the transactions that go in and out of that company and how much information that gives you,” she explained. These tools could revolutionize how asset managers and analysts evaluate investment targets.

Franklin Templeton’s Foray into Crypto

Since taking over Franklin Templeton in 2020, Jenny Johnson has guided the firm into the digital asset space. The company has rolled out several crypto exchange-traded products and pioneered the OnChain U.S. Government Market Fund, a tokenized mutual fund built on blockchain technology.

This embrace of blockchain marks a significant shift for the $1.6 trillion asset manager. Johnson envisions a future where mutual funds and exchange-traded funds (ETFs) are native to blockchains, providing better efficiency and lower operational costs. However, she also cautions that regulatory uncertainty continues to delay this transition.

Regulatory Risks Remain a Major Barrier

Regulation is still the biggest hurdle in the path of blockchain adoption, Johnson said. Aside from structural challenges, the crypto market includes thousands of digital tokens, many of which could fail. That level of risk is difficult for regulators to accommodate and adds hesitation to broader adoption in traditional finance.

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Despite these concerns, Johnson remains optimistic. Her focus on foundational blockchain infrastructure may signal a shift in how institutional investors approach digital assets — not just chasing volatile coins, but backing the technology enabling this financial transformation.