How Stablecoin Payment Cards Work: Security Architecture × Payment Settlement Channels, Adam Lowe (Arculus)

In this episode of Stableminded, host Drew engages in a conversation with Adam Lowe, Chief Product and Innovation Officer of Arculus, exploring how they are building hardware-level security infrastructure for the stablecoin payment card market.

Adam first reviews the development of Arculus: the company initially started as a consumer hardware wallet manufacturer and gradually transformed into a B2B infrastructure provider—he refers to this phase as "grown-up crypto." Arculus is the first company to introduce Elliptic Curve Cryptography (ECC) into payment cards, creating a truly 3-in-1 card:

• It serves as a Visa/Mastercard payment card,

• It is a full HD-level hardware wallet,

• It also functions as a hardware Passkey, all integrated within the same secure element.

Adam confirms that Arculus currently provides underlying card and security capabilities for several crypto card projects, including Coinbase and MetaMask, and explains why stablecoin payment cards have become one of the fastest-growing application scenarios in the past six months.

An important point gradually emerges during the conversation: the real limitation to the large-scale adoption of crypto payments is not the technology itself, but the traditional financial infrastructure. Adam shares some real cases from traditional financial institutions—some banks' internal systems cannot technically accept real-time settlement because their core architecture is designed around T+N clearing cycles. He points out that if true instant settlement could be achieved, the improvement in capital efficiency would be immense: currently, the amount of "idle" funds to cover T+N clearing cycles is as high as hundreds of billions of dollars, and once this "dead money" is released, it will have a profound impact on the entire financial system.

Adam also presents his vision for the future payment system, which he calls "Global Johnnie Walker": in this world, anyone can cryptographically prove their ownership of a digital asset and use it for payment anywhere directly; computer systems will automatically select and route the most efficient payment channels in the background, without the user needing to care whether the underlying asset is a bank card, stablecoin, or another settlement track. He further explains why Arculus chose to incubate and grow within CompoSecure rather than following the traditional venture capital funding path; he also elaborates on how their modular product strategy serves consumers, fintech companies, and large banks simultaneously. Finally, Adam emphasizes a macro-level judgment: the dollar remains the most important "export commodity" of the United States, and stablecoins are, for the first time, genuinely allowing global users to access and use dollars in a low-threshold, programmable, and instant manner.

Opening Monologue:
I have various forms of value storage, whether it's securities, cash, cryptocurrencies, or digital assets. I want to travel the world and seamlessly spend this value storage, rather than being trapped in "islands" formed by various asset classes and systems. After all, these assets are mine. I own the private keys. I can cryptographically prove that these assets belong to me. So please let me consume them in the most efficient way possible. This is my cryptographic proof of ownership of these assets. The rest is up to the computer: let the system determine which path and track can most effectively transfer my value and complete the transaction.

Narration (Program Advertisement):
You are listening to Season Six of Stableminded, sponsored by Rain. Rain helps financial teams build and manage stablecoin-based card projects. With a single API, Rain allows you to issue your own branded cards and unlock new revenue streams. Using Rain, users can store, transfer, and spend stablecoins instantly and compliantly in over 150 countries. In this season, we will explore how Visa, Crossmint, Yellow Card, Arculus, and Wyoming in the United States are embedding stablecoin flows into their respective business systems. To learn more, visit rain.xyz.

Drew (Host):
So, Adam, how have you been lately? Thank you so much for joining the show today.

Adam:
I'm great, thank you for having me.

Drew:
I'm really looking forward to this conversation. You mentioned that you often participate in discussions about stablecoins and payments, and I must say, your formal background is a bit enviable—I might need to get one for myself. Personally, I really want to dive into your background, your experiences, your role at CompoSecure and Arculus, especially how what you're doing now truly integrates with cards, payments, and underlying technology. There’s so much we can talk about today, and I really appreciate you taking the time.

Let's start with your background: what is your role in the company? How did you get to where you are now? It seems to me that you are in a very critical position, driving the adoption of this kind of new technology within a large company.

Adam:
Of course. My name is Adam Lowe, and I am the Chief Product and Innovation Officer of CompoSecure and Arculus. I have been with Compo for about 12 years. Looking back to when I first joined the company, our core business was actually quite simple: making metal cards.

At that time, we primarily served high-end private banking clients, producing some very high-end "financial jewelry" every month. But we knew that for the company to grow, we had to move from a very niche high-end clientele to the mass affluent and even broader consumer market. So we wanted to expand our product portfolio.

My initial work was very technical. For example, one question was: how do you achieve tap-to-pay (contactless payment) with a metal card? This was very challenging because you need to place an antenna inside the metal card, right next to the grounding plane. At that time, people literally told me, "It's impossible." But a few years later, we had issued millions of metal contactless payment cards globally.

Adam:
So for quite a long time, I was primarily responsible for technical expansion—how to truly scale metal cards into a commercially viable payment product.

Then about four years ago, driven by personal interest and my background in defense and security before entering the payment industry, I began to develop a larger awareness. I was thinking: inside a payment card, there is actually a secure element. This chip is responsible for all payment-related mathematical operations and encryption logic. But the problem is—it's like having a V12 Ferrari engine but only letting it run on four cylinders. It was only doing one thing and using a very small portion of its cryptographic capabilities.

So I started to think: since everyone is already so familiar and trusting of the "card" form factor, and we can make it very beautiful and durable, why not let this card do more?

I have always liked a metaphor. On the Food Network, Alton Brown famously said, "Your kitchen should not have tools that only do one thing." So I thought: why should your card only do one thing?

We began to experiment with introducing Elliptic Curve Cryptography into payment cards to do two things:

• Blockchain-related signatures and key management

• Security authentication related to Passkeys (hardware identity keys)

As far as I know, we are the first company in the entire payment card industry—whether metal or plastic—to do this.

Adam:
So today, if our card is Arculus enabled, what does that mean? It means it serves three purposes:

First, it is of course a normal payment card: Visa, Mastercard, Amex, JCB, depending on which network it is issued on.

Second, it is a complete hardware wallet. It is a true HD-level hardware wallet: you generate private keys, store private keys, and manage private keys on the card.

Third, it is also a complete hardware Passkey. Just like someone uses a YubiKey to log into a system, now your Passkey is on this card. You can use it to:

• Manage your crypto Passkey wallet

• Log into Coinbase or other custodial platforms

• Do anything that requires strong identity authentication

All of this happens on this card in your pocket. The keys are offline, there’s no cloud, and thus no risk of cloud attacks.

Drew:
This is really crazy. I think most people are completely unaware of the complexity involved here. What you just described is actually three completely different systems:

• Payment network integration

• Passkey security system

• Wallet and custodial/non-custodial systems

And many companies might focus on just one of these points and already be a complete startup. I want to go back to your background a bit. You mentioned that you have a background in national security and defense. In your view, to what extent is this fintech, especially the current stablecoin and payment systems, also a security issue?

Adam:
To a very large extent. First, the source of the chip is extremely important. Secondly, it’s the code running on the chip. How this code is written, where it is written, and who has accessed it. That’s why when we choose a secure element, we connect directly with the foundry (fab). Our code is securely injected at the foundry stage and is cryptographically signed.

Drew:
How does that work specifically? Can you explain a bit?

Adam:
Sure. You can imagine a process where we collaborate with secure element vendors, such as NXP or Infineon. They then work with the actual silicon foundries. The foundry is responsible for turning silicon into chips. During this process, we securely hand over our code to them. When the silicon is "grown," cut, and etched, there is a small piece of flash memory inside the chip while it is still in wafer form, before it is packaged. At that stage, we securely write the code in.

A wafer might be 12 inches or 16 inches, containing around 30,000 microcontrollers. The code is written at this stage. Afterward, the wafer is cut and packaged, ultimately becoming the chip in your credit card.

So you need to be very clear about:

• Where the chip is produced

• What the code flow path is

• How the keys are managed

For me, these have become daily work, and sometimes I even subconsciously "skip" over them. But in reality, it involves a lot of security processes, logistics controls, and certification systems. This includes but is not limited to: FIPS, EMVCo, certifications from major payment networks, and ISO standards. All these things piled together form an extremely large engineering system. The entire team has put in a tremendous amount of effort to ensure that everything is compliant and certified.

Drew:
One point you just mentioned is very important. From the outside, what Arculus can do—hardware wallets, identity, security, payments—could easily be spun off into separate startups. But Arculus was not born that way. It was incubated within CompoSecure. Can you elaborate on that? Especially how you communicated with the CEO at that time? And how different was your initial vision for Arculus from what it is today?

Adam:
That's a great question. Let me start with a key point: being "born in the payment system" in the payment field is very helpful. Going back about four years, I had been at Compo for about eight years. I went to talk to our CEO—John. I told him a few things:

First, I see a rapidly forming space: identity and payments will continue to merge.

Second, from a technical perspective, blockchain is faster, cheaper, and better. It’s not a matter of sentiment; it’s an engineering fact.

Third, I said: we don’t want to stand by the tracks watching the next generation of railroads being built, only to find we have no tickets. We must stand at that intersection and be able to serve all different "gauges" of railroads.

John is a very visionary person. I told him: give me some money, and I will give you a digital business. Four years later, we indeed achieved that. Arculus has become our complete platform in the direction of digital assets and digital identity:

• Custodial and non-custodial

• Security

• Payments

• Even POS scenarios (which we can discuss later)

John's judgment was very correct. Arculus is my "child," which I have nurtured from four years ago to today.

Drew:
So how did you feel walking into that meeting? Was your relationship with John already deep at that time? And how much has the story you were "selling" evolved compared to what has actually happened today?

Adam:
We have always had a good relationship. And to be honest, no project ever ends up looking exactly like your initial vision. At that time, the focus was actually on the consumer hardware wallet. That was Arculus's first product. We still sell a lot of that product, and I really like it. But the core logic back then was:

• This is a new business vertical

• It can leverage the hardware we are already making

• There’s no need to reinvent the manufacturing system

• We are already producing millions of cards of this form every year

Now we are just selling it to a new market.

Adam:
As for why I chose not to go out and start a new venture but to do this within Compo—I would say a very realistic thing: I am an extremely risk-reward oriented person. In my mind, I do a risk-adjusted reward calculation.

You can imagine that in my conversation with John, it certainly included:

• My career development

• My incentives within the company

• The incremental value this business would bring to the company

These are all practical issues. You could certainly go to a16z, raise a lot of money, and then see how much equity you have left. That’s another option, but it’s riskier, the support network is slower, and you have to build everything from scratch.

Doing this within a large company is not without its challenges. Compo has long been a manufacturing company. Suddenly having to do: software, software licensing, and execution systems that have almost nothing to do with manufacturing is a mindset shift. So no matter which path you choose, there are difficulties. Entrepreneurs face: funding, survival, and everything resting on their shoulders. Starting within a large company: you have to change existing paths and persuade people who have been doing manufacturing for a long time to accept software business. So my advice to others has always been: calculate your risk-adjusted rewards and then choose the path that maximizes your chances of success.

Drew:
From the outside, this choice now seems very correct, especially with some recent partnership announcements. For example, Coinbase One Card, American Express, CompoSecure—these relationships will obviously bring a lot of opportunities back to Arculus.

Adam:
Yes, indeed. I remember our first time attending Consensus, and even earlier at CES, just because the timing happened to align. From almost no one knowing Arculus at the beginning to now, when we go to Consensus, everyone knows who we are.

Drew:
I don’t think I’ve seen anyone who doesn’t know Tom.

Adam (laughs):
Tom is everywhere. If there were a leaderboard for "most attended crypto conferences," Tom would definitely be at the top. I can’t run around to as many conferences as I used to because I have so much going on at Compo. Now the situation is often: Tom is in Singapore, and I’m in Germany. Basically, we’re running around the globe.

Drew:
Alright, let’s officially focus on Arculus itself. You secured internal funding, established Arculus, and you’re leading this team. Can you systematically talk about:

• How Arculus initially started

• What kind of evolution it has gone through over the years

• And what the biggest changes are at this stage compared to the beginning?

Adam:
The biggest change is very clear: the focus has shifted from consumers to B2B. If you look at the B2B crypto card market:

• Coinbase card (officially announced)

• MetaMask card (officially announced)

• Gemini

• And many others

Basically, any metal crypto card you can think of, we are working on.

Adam:
Some partnerships are public, some are not, and I won’t specify which card uses which part of Arculus technology. But overall, we provide our partners with: wallet capabilities, Passkey, payment network capabilities—whatever they need, we provide.

Looking back historically: the earliest Arculus cards only had consumer hardware wallets. Later, we gradually added Passkey technology because we also wanted to serve custodial scenarios. Initially, Arculus was purely non-custodial; now we support both:

• Custodial (Coinbase)

• Self-custody (MetaMask, Arculus Wallet)

Because I always believe: users should have a choice.

I still love our consumer products, and I firmly believe it is currently one of the best consumer-grade hardware wallets on the market. But in terms of business scale, the growth rate of B2B has already become "exponential."

Drew:
Let’s return to the consumer product line. If someone is listening to the show for the first time and hears about Arculus, how would you explain in one sentence: what is it? Who is it for? What problem does it solve?

Adam:
Let me start with a possibly counterintuitive statement. Early hardware wallets were actually "deliberately made difficult to use." It felt like an "geek club": you had to understand it to be worthy of using it. I really want to change that. We have an internal standard that I call the "Mom Rule": if I can’t hand this product directly to my mom, and she can use it without me explaining, then the product is still too complicated.

So the Arculus consumer product is essentially a hardware wallet. But its interaction method must be understandable to ordinary people. What it does is:

• Generate private keys on the card

• Store private keys on the card

• Manage private keys on the card

You have complete access to the entire crypto ecosystem.

The usage process is very simple:

Step one, you download our mobile app (free).
Step two, you use the Arculus card to generate and manage your private keys.
Step three, when you need to do anything on-chain—
you just need to:

• Tap the card to your phone

• Enter your PIN

• And you’ve already done biometric recognition when entering the app

This is truly three-factor authentication (3FA).

Adam:
I often tell people: while others are still plugging in USBs, turning on screens, and waiting for devices to boot up, I’ve already completed the transaction. Because the experience is as fast as swiping a card at a POS terminal. And the most critical point is: your private key is in your pocket, stored offline, running on a security operating system equivalent to that of billions of credit cards worldwide. This system has never been breached.

Drew:
This product has been live for several years, right? What year did you officially launch it? Looking back now, who do you see as your typical user?

Adam:
Yes, it has been several years. Our typical user is actually a second-stage user in their crypto journey. Self-custody is usually not a person's "first stop."

The first stop typically is:

• Robinhood

• Coinbase

• Any custodial platform

This is a very natural path.

The second stage is:

• You have accumulated a certain amount of assets

• Or someone has repeatedly emphasized "Not your keys, not your crypto"

• You start to take asset ownership seriously

At this point, you think: "Okay, I want to self-custody, which one should I choose?" That’s exactly the user group for Arculus.

Of course, there’s another type of user:

• Very tech-oriented

• Very security-conscious

• Even at the first step, they don’t want to hand their assets over to custodial platforms

Another interesting phenomenon is: we have a very large XRP user base. So from a chain perspective, user distribution also varies.

Drew:
And what about you? If you were to categorize yourself, which type of user do you belong to?

Adam:
I am definitely self-custody. I have stored Bitcoin and some other assets on Arculus, though the amount isn’t enough for retirement yet (laughs), but indeed a significant portion of my assets is on Arculus.

Drew:
When did you first come into contact with blockchain? Was it Bitcoin?

Adam:
Yes, it was Bitcoin. I was in graduate school at the time, right around when the white paper came out. This is actually quite similar to an episode of The Big Bang Theory. They have an episode where they say, "Do you remember that white paper we read together a few years ago? Does anyone remember where our private keys are?" Everyone says, "No." That episode really resonates with my life experience. At that time, a few friends and I read the white paper, ran some code on our laptops, mined a little, played around a bit, and then—well, the private keys just disappeared.

So later, I did hold Bitcoin, XRP, and some other assets, and I quickly turned to self-custody. For me, this is not just a technical choice, but also a personality and value choice.

Drew:
Alright, let’s push the timeline forward. You already have:

• Consumer hardware wallets

• Card form factor

• Private key security

What happened next is that Arculus clearly began to lean towards a B2B model. How did this path emerge? Was there a key partnership? Or was it a gradual realization that this had to happen?

Adam:
I think part of the shift to B2B was actually a very natural occurrence. When you are growing any business, you will leverage the resources and network of relationships you already have. And at CompoSecure, we have very deep relationships in the traditional payment world. To put it bluntly: we are the kind of company that can actually call up

• JPMorgan

• American Express

• Revolut

• N26

• And various major issuers and issuing platforms

And they will answer the phone.

Adam:
Because we have such deep relationships with banks, issuing institutions, and issuing platforms, when stablecoins and Web3 began to gradually enter the mainstream, we almost naturally became the preferred partner for many institutions. They would come to us and say, "We want to truly implement these things into payments; can you help us?"

So we began to serve more:

• Issuer processors

• Actual issuing banks

• Various layers of payment infrastructure in between

Essentially, we are integrating our already mature technology into the existing banking network.

Many companies trying to create Web3 products will attempt to "push products upstream," but I am very glad that we don’t need to do that. Because we are genuinely adding value for our partners:

• Hardware

• Software

• Smart contracts

• Private key and identity security

For example: Aptos used our hardware wallet during their major release; Chain Finance white-labeled our hardware; and there are some very large partners who have white-labeled our technology. Plus, the recently announced partnerships with Coinbase, MetaMask, and others.

Drew:
If I understand correctly, it sounds like Arculus is solving some extremely difficult and highly regulated problems. Many builders might feel, "We don’t want to touch this problem at all; we’ll just leave it to Arculus." In your view, what are the types of problems that lead these teams to choose to "give up doing it themselves" from the start?

Adam:
That’s a very good question. The core reason can be summed up in one sentence: once you touch traditional payment tracks, things become extremely complex.

For example: if you want to put certain logic into a smart card, and that card is from Visa or Mastercard, then it’s not just a matter of "can it run technically." It also has to be: approved by the payment network, certified, formally sanctioned and "blessed"; you not only have to make it work, but also get Visa, Mastercard, and EMVCo to nod their heads.

This process is:

• Very time-consuming

• Extremely costly

• Highly specialized

• And very niche

You must know:

• What the standards are

• What the documentation is

• What the review process looks like

More importantly: you don’t just review once.

Drew:
What do you mean? Is it for every transaction?

Adam:
Exactly. You first go through an overall certification to ensure your system meets the standards. Only then are you "allowed" to consider that every transaction occurring in this system is compliant. But to achieve this, you must design everything according to the standards from the beginning. If you are doing a tokenized card or some objectified card logic, they operate under extremely strict protocols. From an engineering perspective, building and maintaining these systems is a very painful task. So for most teams, it’s simply not worth it to research everything from scratch. Coming to us is a more rational choice in terms of cost, efficiency, and risk. This is the first layer of our moat.

The second layer of our moat is: patents. CompoSecure holds hundreds of patents in this field, covering areas such as: metal cards, Web3 on card, Passkey on card—this is something we take very seriously. It’s not a field you can just "easily bypass."

The third layer of our moat is: scale. Compo produces millions of cards every year. We handle massive transactions. We serve a large number of Web3 clients. For many teams, their core focus should be on: remittances, payment products, specific vertical businesses, rather than: reinventing payment cards and security systems. That’s precisely why we exist: to let them focus on their mission while we provide the infrastructure needed to accomplish that mission.

Drew:
In all these B2B use cases, is there any particular use case that excites you the most or resonates with you? Not asking you to name clients, but from the perspective of "how Arculus is being used."

Adam:
That’s a good question. Because Arculus itself is highly modular, it does make it a bit difficult for the outside world to understand. Some people only need one of the three components; others, starting from scratch, need all of them.

As a builder, I really like this modularity. I often use Legos as a metaphor: I want to have all colors and shapes of blocks so that I can build what I truly want. But from a sales perspective, this is indeed harder to sell. Because you need: deeper conversations, and the client must truly understand what they need, rather than something simple like, "I have a pen; do you want to buy it?"

What we often refer to as the "three-in-one card":

• Payment card

• Passkey

• Wallet

You can mix and match as you wish. Do you need a Passkey server? We have that. Do you need backend connections to all mainstream blockchains? We have that.

If the client is very tech-oriented, we will engage in very in-depth technical discussions:

• What language to use

• How to optimize performance

• Which modules to use and which not to use

So ultimately, it’s about understanding your customer.

Adam:
I have a vision that I often discuss with Tom. I call it "Global Johnnie Walker." To be honest, it has nothing to do with how good the drink itself is; I just really like that logo.

Drew:
You mean the logo of the guy walking with a cane?

Adam:
Yes, that Johnnie Walker logo. I’ve always had this image in my mind—a global traveler. This person is "empowered." It’s a highly permissionless state. What I’m saying now is completely my personal opinion, not the company’s stance.

In this world:

• I have private keys

• I own my assets

• I don’t need to ask anyone for permission

I can travel the world, and I can buy, sell, and exchange anything I need. I give you value, and you give me value. This is a permissionless value exchange. In a sense, it’s almost like going back to the "cash era." Previously: cash in hand, goods in hand. Now: one hand is digital assets, and the other is instant settlement of value transfer.

If you can accomplish this with the lowest cost and the highest efficiency, then you have truly achieved competition. Cost is just cost—there are no hidden fees, no layers of friction added in between. This is the world I hope we can reach.

And right now, we haven’t fully arrived. To achieve this goal, you must serve eight different "gauges" of railroads simultaneously. The tracks that assets come in on are different, and the tracks they go out on are also different. You must be able to:

• Know what track it comes in on

• Know what track it goes out on

• Automatically route in between

This is extremely difficult. But this is precisely what we are working hard to do in the background. The ultimate ideal state is: trains can come in on any gauge and go out on any gauge, and for consumers and merchants, all of this is seamless. We haven’t fully achieved that yet, but it’s the direction I strive for every day.

Drew:
I think you guys are already making significant strides in that direction. The name "Global Johnnie Walker" itself is very evocative. You also mentioned that you are doing some very cutting-edge things, such as completing payments directly using stablecoin tracks at the POS.

Adam:
Yes. You and I have seen that demo. We can now achieve: directly on-chain payments using stablecoins via tap-to-pay. Further, you are not just "paying."

You can:

• First go through a DEX

• Or go through a centralized exchange

• Automatically convert to the most suitable asset

• Then complete the payment

Arculus itself:

• Has Paxos accounts

• Has Circle accounts

We can:

• Route stablecoins

• Mint

• Burn

Completing a lot of complex operations in the background.

Drew:
So the world you’re describing is also the endgame that many stablecoin companies are pointing towards. Rain is heading in that direction, and many builders are as well. From your perspective, how far are we from this reality?

Adam:
I don’t think we are that far. You’ve already heard: AMEX is talking about stablecoins, Brian Moynihan (BofA) is talking about stablecoins—I really don’t think this will take ten years. Just the other day, I was discussing this with someone. The real key is: how quickly banks will become blockchain companies, or how quickly blockchain companies will become banks. At least in the U.S., we don’t have something like an "Electronic Money Institution (EMI)" license. If the U.S. had EMI, many things would be much easier. The GENIUS Act has indeed helped a lot, but if there were EMI, the entire system would be much simpler.

Drew:
Who do you think the GENIUS Act benefits more? Banks or blockchain companies?

Adam:
I think it generally benefits the blockchain side more. Companies like Circle and Tether may gain more from it than traditional banks. The next major battleground will be: tokenized deposits vs stablecoins. This is not a technical issue, but a regulatory issue.

To be honest, I personally hope that everyone lives directly in stablecoins. Every mint/burn is actually unnecessary friction. Some say, "Stablecoins are dead money." That’s not true. You can wrap it, earn yields, and then unwrap it to continue spending. I personally hold a lot of wrapped stables, generating yields every day.

Drew:
From what you just said, it seems you believe that the events of the past few months have brought us much closer to that "on-chain native payment world" than most people realize. But I’m curious about one thing: in your view, where is the real uphill battle? Because the gap between "willing to do" and "actually implementing" often lies in very specific, very messy execution details.

Adam:
You’ve asked a very pertinent question. The real difficulty is not blockchain, not stablecoins, and not smart contracts. The real difficulty is: the backend infrastructure of traditional finance. Let me tell you a very common and very real scenario. I’m drawing a flowchart with a traditional financial institution on a whiteboard. I say, "Okay, we can settle this step in real-time." The other party immediately says, "Wait, no. We can’t collect money that quickly."

Drew:
Can’t? That sounds a bit counterintuitive. Why can’t they receive money faster?

Adam:
The reason is not regulatory; it’s a pure mechanical issue. Their:

• Internal ledgers

• Internal clearing systems

• Core banking systems

Simply cannot handle real-time transactions.

Drew:
So it’s a problem with the "system brain" itself?

Adam:
Exactly. Many traditional financial institutions’ backends are built on very old architectures. You can think of it as:

• Code written decades ago

• Core logic designed around T+N

• All assumptions are that "money won’t move this quickly"

So when you suddenly tell it, "The money is here now," the system doesn’t know how to handle it.

Adam:
This leads to a very ironic phenomenon: we can already:

• Transfer money instantly between people

• Transfer money between banks faster

But at a higher level, which includes:

• Regional banks

• The clearing institutions serving these banks

• And down to the central bank level

This chain still heavily relies on very old infrastructure. And upgrading these systems is very slow. Because the issue is not just technical; it’s: who will pay for the upgrade?

Drew:
That sounds like a classic "no one wants to be the first to move" problem.

Adam:
Absolutely correct. So in my view, this is the heaviest stone in the entire system.

Drew:
From a certain perspective, Arculus seems to be positioned right between these two worlds: one side is the new world, and the other side is the old world.

Adam:
Yes, that’s why I say we serve Web2, Web2.5, and Web3 simultaneously. We cannot pretend the old world doesn’t exist. You must be able to communicate with it, be compatible with it, and gradually replace it. Drew:
Let’s bring the focus back to a more specific point. In the past six months, stablecoin payment cards have become one of the fastest-growing use cases in the entire asset class. You are in a very core position in this field. How do you view this surge? What role has Rain played in it?

Adam:
I think Rain is very important in the entire ecosystem. Especially:

• Their understanding of payments

• Farooq’s background

• The smart contract structure they designed

All are very "payment-friendly."

Simply put, Rain’s model is this: you put stablecoins into a smart contract. This contract settles monthly. If you repay on time, the assets stay there. If you don’t repay, the assets will be liquidated to pay off your debts.

From a user experience perspective, it almost completely resembles a traditional credit card: Visa/Mastercard track, merchants are completely unaware, settlement logic is familiar, but the underlying asset is actually stablecoins.

This solves a very real problem. In the Web3 world, there are many: DAOs, Web3 companies, crypto-native teams that hold large amounts of digital assets, but daily life and operations still occur in the Web2 world. You still need to: buy food, book hotels, pay for SaaS, and pay salaries.

Rain provides a way to truly connect Web3 assets to Visa. For a very specific example: I might have a bunch of BONK. I first convert BONK to USDC on Solana. I push the USDC into a smart contract. I swipe my card to buy pizza. At the end of the month: the system automatically settles, USDC is burned, and the merchant receives fiat currency, completing the process.

Adam:
And our role here is to make all of this "really happen in the real world." The card is with us. The signatures are with us. The wallet is also on the card.

When you sign that smart contract, the private key used for the signature resides on the card. So on one side, we are communicating with Visa; on the other side, we are signing Solana/Ethereum contracts. These two tracks are completed within the same physical secure object. This is also why I say Arculus and Rain are highly complementary. They have implemented smart contracts on many chains, and we have done so on some chains they haven’t covered yet. This is a very natural collaborative relationship.

Drew:
I want to use a very specific business example to "ground" what we just discussed. Our company is currently using Dakota for corporate banking and stablecoin treasury. Through Rain, we now have an embedded card that can be used like a credit card, connected to Dakota’s stablecoin account. I haven’t received a physical card, nor did I apply for it specifically; it’s now completely in digital form. If I didn’t know about Rain’s existence, I might think, "This is just a card issued by Dakota itself." So from your perspective, in this absence of a physical card, is Arculus still in that chain?

Adam:
The answer to that question is: it depends on the specific platform’s implementation. In the very specific scenario you described, we are not in that chain.

But if the issuer:

• Uses Passkey

• And has used our Passkey product

Then we might appear at the identity authentication layer. For example: we can use Passkey to protect the process of logging into the Dakota platform.

Let’s take another example. If you are using a Passkey-native wallet, such as Coinbase’s wallet (which they now call Base App), then Arculus can fully participate in that.

Drew (laughs):
I really can’t keep up with their renaming.

Adam (laughs):
Neither can I. But the point is: Base App is fully Passkey compatible, and Arculus can work in conjunction with it. This actually ties back to the question you asked earlier: modularity.

Most of the time, we are behind the scenes. But "which block is used behind the scenes" completely depends on: who the platform is and what the use case is.

Drew:
And what about you? You personally are also using the card issued by Rain, right?

Adam:
Yes. I personally use the Arculus corporate card issued by Rain.

Drew:
Does this card connect to Arculus’s corporate account? Or some kind of corporate expense account?

Adam:
Essentially, it connects to stablecoins. For example: finance gives me a budget of $500. What I receive is: $500 in USDC. I push this 500 USDC into a smart contract. After that: I travel for business, buy coffee at a meeting, buy tacos—every expense: generates a receipt and is managed in Rain’s system. At the end of the month:

• The portion of USDC I spent

• Will be burned

• Will be settled

• Will be paid to the merchant through the banking system

For the merchant: this is just an ordinary Visa transaction. They have no idea that it’s backed by stablecoins.

Drew:
That’s really cool. Platforms like Ramp and Brex are developing very quickly. Do you have partnerships with these platforms?

Adam:
Yes, they are all our clients.

Drew:
At least Ramp has publicly stated that they want to introduce stablecoin tracks into corporate expense management. Do you think this is a wave that is forming?

Adam:
I can’t comment on specific companies’ roadmaps because that’s their own business. But I can say that: in these types of platforms, our Passkey product fits very well. Many of these platforms will choose professional custodians at the digital asset or stablecoin level.

In this model:

• Passkey can be embedded in their internal systems

• To protect employees

• Or protect customer accounts

For example: employee identity, employee login, access to internal corporate systems—Passkey is far superior to passwords.

Drew:
And in this employee use case, it doesn’t even necessarily need payment functionality, right?

Adam:
Absolutely correct. The integration of employee ID, access control, payments, and logins. We have already done some proof of concepts. You can imagine: an employee ID card.

It can:

• Be swiped to enter the office building

• Also be a Visa/Mastercard

• Also be a Passkey

You can:

• Use it to buy lunch

• Tap it on your computer

• Log into the system via Windows Hello

All of this can be done on the same card. Instead of the current situation where there are:

• Six systems

• Six sets of credentials

• Six isolated security domains

Drew:
That’s the charm of modularity, but it also means: your go-to-market strategy is actually quite challenging.

Adam:
Yes. There are indeed many companies in the market that only do one of those points. Many of them are also very traditional and legacy. We often encounter situations where I walk into a large institution or casino and say, "Look, these systems can all be connected." Then I see: six people in charge, managing six systems, each of which is hard to change. This isn’t a question of whether the technology can work; it’s that: transforming old systems is slow, messy, and difficult.

Drew:
We’re almost at the end. Before we wrap up, I want to return to a bigger question. From your position—you are deeply involved in both the stablecoin world and the traditional payment and issuing systems. How do you view the stablecoin payment card space itself? Especially in emerging markets or some non-dollar countries, what do you think will happen next?

Adam:
I think we will see a huge growth, primarily occurring in non-dollarized markets. The reason is very simple: they crave access to dollars. I have been saying this for many years, and I will continue to hold this view: the most important export commodity of the United States is far from the goods themselves, but rather the dollar.

In the past period, I believe the U.S. has not done well in this regard. The "Gensler era" has harmed the global accessibility of the dollar. We should have been actively promoting the use of the dollar globally through stablecoins, expanding the dollar’s influence. But during that time, we chose to: tighten, close, and hesitate. Now the situation is changing. We are starting to encourage access to dollars through stablecoins again. This is very good for the United States.

What does this mean? It means:

• More people globally using dollars

• Increased demand for U.S. Treasury bonds

• A more solid foundation for the U.S. financial system

So I believe:

• Emerging markets

• Remittance scenarios

• Consumption based on stablecoins

Will continue to explode.

Another advantage of stablecoins, which is often overlooked domestically in the U.S. because it doesn’t sound as "sexy," is: capital efficiency.

In the current payment system, due to T+N settlement, a large amount of funds is forced to exist as collateral. As an issuer or payer, to cover: weekends, holidays, and settlement delays, you must prepare in advance: millions of dollars, even tens of millions of dollars. This money just sits there, generating no efficiency and creating no value; it’s completely "dead money." But if you can achieve: real-time settlement and a good funds model, then the money is truly there. You can release a large amount of locked-up capital. This is an immense improvement in efficiency.

Drew:
Adam, this conversation has been truly fascinating. One last question: if someone is listening to the show today, they might already be in the stablecoin industry or preparing to enter this industry. What would you say to them? Or to put it another way: who is suitable to seek out Arculus? Who might not be suitable?

Adam:
I think Arculus is for those who want to seriously engage in "grown-up crypto." I’m not talking about: memes, 8-bit cats, or some fun but highly niche things—those certainly have their value, but that’s not our focus.

What we want to do is:

• Change payments

• Expand the accessibility of the dollar

• Improve global financial efficiency

What I want to say to the stablecoin and digital asset industry is: if you truly stand at the intersection of Web2 and Web3, and what you want to do is payments and financial infrastructure, you will find that serving different "gauges" of railroads is an extremely challenging task. I can honestly say: I have "spent several years of my life" to enable Arculus to serve Web2, Web2.5, and Web3 simultaneously.

So my invitation is: if you are doing this or preparing to do this, we have built a very strong platform. If there are some parts we can’t handle, I can almost guarantee: we have very good friends who can fill in. Let’s form an alliance to truly get things done and genuinely change the world. That’s also the reason I walk into the office every day.

Drew:
That’s fantastic. Adam, thank you very much for your time today. This has truly been a highly valuable conversation. I completely agree with your concept of "grown-up crypto." I think more and more people are moving from the "hobby stage" to the real building stage. It has also been a pleasure to collaborate with you and Tom in recent months. Thank you once again.

Adam:
Thank you. This chat has been very enjoyable.