Openpayd’s Lux Thiagarajah: ‘Decentralization is an Evolutionary Layer, Not a Replacement’

Lux Thiagarajah argues that decentralized technology is not displacing banks but “re-platforming” them. According to him, regulated entities will remain essential because governments will not outsource prudential oversight to permissionless systems.

When asked if decentralized tech is destined to replace legacy systems, Thiagarajah was clear: This is an evolutionary layer, not a replacement. He points to the behavior of the world’s largest financial institutions—from JPMorgan’s Kinexys to Blackrock’s BUIDL fund—as proof of a “re-platforming” rather than a displacement.

“This is not decentralization displacing banks,” Thiagarajah noted. “It is banks integrating decentralized technology into their existing models. KYC, AML and prudential oversight are not optional, and governments will not outsource those responsibilities to fully permissionless systems.”

However, a new challenge has emerged: regulatory divergence. While the EU’s MiCA framework emphasizes strict, state-directed supervisory control, the U.S. GENIUS Act focuses on federal legal protections and the separation of banking and commerce.

This raises a critical question for global treasurers: Will businesses be forced to maintain separate, isolated on-chain stacks for every jurisdiction? Thiagarajah believes the answer lies in the architecture.

The 10-year outlook suggests that while banks as regulated entities will remain, the “legacy constructs” that define them—batch-based settlement and multi-day processes—will vanish.

The CCO asserts that unless there is a massive structural shift in the dollar’s role as the global reserve currency, the market will remain fundamentally dollar-denominated for the foreseeable future.