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.
From Revolution to Infrastructure
For years, the promise of blockchain in finance was draped in the language of revolution. The world was repeatedly told that “crypto-invoicing” would upend the global supply chain. Yet as the dust settles in early 2026, the reality of institutional adoption is proving to be more pragmatic—and arguably more powerful.
In a discussion on the structural shift of digital assets, Lux Thiagarajah, chief commercial officer (CCO) at Openpayd and a veteran of JPMorgan Chase and HSBC, shed light on where the “smart money” is actually landing. His verdict? The revolution isn’t happening in the front-end billing office; it’s happening in the plumbing.
The backdrop to this shift is a transformed regulatory landscape. With the full implementation of the European Union’s Markets in Crypto-Assets (MiCA) regulation and the 2025 enactment of the U.S. GENIUS Act, stablecoins have officially graduated from experimental “wallet-based” tokens to regulated “account-based” production tools.
“The strongest institutional buy-in remains in the on- and off-ramp space,” Thiagarajah explained. “While often described as simple infrastructure, these rails are the critical bridge between traditional fiat systems and blockchain networks.”
While the industry once dreamed of a world where every invoice was a programmable non-fungible token ( NFT), institutions are currently focused on settlement velocity. By embedding stablecoins into their backend operations, companies are slashing settlement times from days to seconds. However, the “last mile”—the ability to convert that digital value back into fiat—remains the most sought-after capability.
The Re-Platforming of Giants
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 underlying technology is not fragmented,” he argued. “Blockchains, wallets and smart contract logic remain aligned. If infrastructure is built around a single core ledger, with compliance logic applied at the asset layer rather than the chain layer, we can avoid creating multiple isolated environments.”
The real risk, he warns, is not the rules themselves, but a lack of interoperability. If liquidity in the Eurozone is locked in MiCA-compliant tokens while U.S. liquidity sits in GENIUS-compliant tokens, the cost of moving money across borders could remain high despite the technological leap.
The End of the ‘Batch-Based’ Era
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.
As the CCO of Openpayd, Thiagarajah’s role is to position the firm as the architect of this bridge phase. By providing the universal infrastructure that connects domestic fiat rails with blockchain networks, Openpayd is enabling institutions to scale their digital asset strategies without waiting for a total global overhaul of business accounting.
Meanwhile, Thiagarajah shared his thoughts on MiCA’s strict transaction caps on U.S. dollar-denominated stablecoins within the European Economic Area. Though designed to protect the euro, such a requirement risks creating significant friction for European businesses, Thiagarajah argues. He said businesses may have to take “the long way round” to settle transactions, while forced conversions of euro-backed tokens into the dollars needed for international goods and services could lead to increased foreign exchange costs.
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.
Thiagarajah rejects the notion that regulation inherently stifles growth. Instead, he posits that regulatory transparency is the missing ingredient that finally justifies Tier 1 institutional flows. For banks and funds, “unclear” is synonymous with “uninvestable.” Therefore, laws like MiCA and the GENIUS Act provide the formal permission these institutions need to move from pilots to massive liquidity deployment.
FAQ ❓
- What is the current state of blockchain adoption in finance? The adoption is more pragmatic, focused on backend infrastructure rather than a front-end revolution.
- How have new regulations affected stablecoins? Regulations like the EU’s MiCA and the U.S. GENIUS Act have transformed stablecoins into regulated production tools.
- What role do banks play in integrating decentralized tech? Banks are not being replaced but are evolving by integrating decentralized technology into their existing systems.
- What challenges does regulatory divergence pose for global businesses? It may require businesses to maintain separate systems for different jurisdictions, risking increased transaction costs.