The Payments Experts Podcast
Expert payments attorneys discuss the electronic payments industry from a legal perspective.
The Payments Experts Podcast
Tokenized Deposits vs Stablecoins: The Real Payments War | Stablecoins Become Payment Rails | PEP098
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Stablecoins aren’t a side conversation anymore — they’re knocking on the front door of the payments ecosystem.
In this episode of the Payments Experts Podcast, we sit down with Adam T. Hark, managing member of Wellesley Hills Financial (https://www.wellesleyhillsfinancial.com/), for a wide-ranging, candid discussion on how stablecoins, tokenized deposits, and wallet-based payments could fundamentally reshape merchant acceptance, interchange economics, and the role of card networks.
We explore a provocative question most of the industry is quietly wrestling with: Are companies like Coinbase and Circle actually payments companies — and if so, what happens next? From Walmart-scale economics and closed-loop possibilities to the realities of consumer incentives, education gaps, and merchant readiness, this conversation cuts past headlines and into operational truth.
Adam breaks down where stablecoins realistically fit today (ACH, debit, and cash replacement), where they don’t (credit and rewards), and why JPMorgan’s tokenized deposit strategy may be the most underestimated development in modern payments. We also examine who bears responsibility for educating merchants, how ISOs and processors may be bypassed entirely in some models, and why free-market dynamics — not regulation alone — will determine winners and losers.
This episode is not about hype. It’s about what changes first, what breaks second, and what payments professionals need to understand now to stay relevant as rails, wallets, and value transfer evolve in real time.
If you work anywhere near payments strategy, merchant services, fintech infrastructure, or financial services M&A, this is a conversation you’ll want to hear.
**Matters discussed are all opinions and do not constitute legal advice. All events or likeness to real people and events is a coincidence.**
PEP Links:
https://www.globallegallawfirm.com/podcasts/
A payments podcast of Global Legal Law Firm
Are Coinbase And Circle Payments Companies
SPEAKER_00Or the you know, uh the Pfizer of the Global Payments, the FIS of the world. It may be direct with Coin Coinbase and Um Circle. Very interesting. Yeah, uh I go back to that conference a month ago. You know, there was a uh uh there was an analyst analyst there uh for equities, and I you know, he was doing his presentation and he did this whole thing on you know the the big names that we all know. And I asked him this you know, it was a very straightforward question. Do you think that next year you know you, your firm will initiate coverage on Coinbase and you know uh circle as payments companies. Payments companies. Now he answered in the negative, and I you know, I I just was curious as to what his answer would be. You know, I left there thinking that's not right, man. Um they are payments companies. We got new payments companies in the ecosystem um that are joining the party, and uh that is a reality.
SPEAKER_02Welcome to the Payments Experts Podcast, a podcast of global legal law firm. We hope you enjoyed this episode.
SPEAKER_03Amazon, I'm a big Amazon guy. Do you see stable coins being integrated into these daily functions that we all partake in with, meaning online ordering through the target, the Walmart? Is there any benefit to that to the consumer, to the retailer?
SPEAKER_00Okay, so uh well there are different parties, there are different constituencies in. So I think, you know, as it relates to the Amazon, okay, the Home Depots, the Walmarts, the Targets, the the uh the Costco's, there's an eck there's a real economic driver there. I mean, these are very large companies. Granted, they've all negotiated, you know, due to their volume amount up volume of payments that they're processing, they've negotiated, I'm sure sweetheart deals in terms of interchange. That being said, I mean, um we uh uh another one of our executive advisors, uh Wayne Johnson, is based in Atlanta, is just a brilliant, brilliant um payments analyst. And he he did this exercise. I asked him, you know, if he could help out, and he just kind of did some back of the napkin math as it related to Walmart specifically. And, you know, uh people also forget that, you know, cash has a cost attached to it too. Sure. To accept cash. So he figured on a blended rate, you know, between uh credit, debit, and cash that a company like Walmart, based on the information that they do make public, probably pays between three billion to five billion dollars a year in um fees for um for payments processing. Wow. So imagine, you know, a company like this. Yeah, that isn't that's real money.
SPEAKER_02That's real money.
SPEAKER_00That is real money. And his example, he said to me, you know, and he he I I love this because he put it very starkly. Imagine you walking into Walmart's CFO's office and saying, I have a way of saving the company maybe three to five billion a year. We convert to stable coin, okay, our own stable coin. Effectively, you're turning Walmart into issuer and acquirer. Wow. Yeah and merchant.
SPEAKER_03Almost like a closed loop system.
SPEAKER_00Essentially, yeah, they become an MX. Yeah. Their own MX. Wow. Um so I think there are there are free, man.
SPEAKER_03We gotta start charging people for this.
SPEAKER_00So there's there's real, there's real economic uh argument for uh big retail to jump in. I think at the end of the day, though, as it relates to adoption, you know, there are two things here's what there are two things in play. Um um one of them is, you know, how do you get consumers to get on board? And I think you have to think of incentives, right? And you need to incentivize, which which now, you know, just to tie in a whole bunch of stuff and make this really interesting. Like the the recent um uh press release, it might have been that uh last week where Visa and MasterCard, the card networks announced a proposed settlement on um interchange and giving merchants the right to like not accept certain types of cards because you know that reward piece is very expensive on the merchant side.
SPEAKER_02Yeah.
SPEAKER_00So, you know, that factors into this now because now you've got a bunch of big merchants that are, you know, maybe they'll say, you know, you know, and the you know, we're not gonna take your you consumer, we're not gonna take your you know your Delta Sky Mile scan anymore so you can get the uh Yeah. So that factors into it because they're taking away that lever of uh incentivizing consumers to use certain types of payments methods, and it it leaves the door wide open for somebody on the stablecoin side, like a Walmart, to start, you know. Remember, this is smart money. They can run you know, it there's smart contract capabilities here. You can do whatever you want with the stablecoins.
SPEAKER_03I think the friction is gonna be on the consumer side, getting the consumer to understand that it's not as complicated as it may sound. Trevor Burrus, Jr.
SPEAKER_00I agree with that. I mean that's a big, big thing.
SPEAKER_02It's been the issue for years. Trevor Burrus, Jr.
Incentives, Rewards, And The Interchange Settlement
SPEAKER_00And the other thing, too, to remember is that, you know, um with stable coin, uh it's mindful we need to be mindful that it and this goes back to the JPMD thing, because here's another thing that I don't think people realize. When we think of stablecoin and and and USDC or tether, um there really isn't a credit product out there. This is stuff that's gonna replace ACH, it's gonna replace debit cards um and cash. Okay. JP Morgan, okay, with the tokenized deposits, they already have the infrastructure for a credit product. Yeah. I mean, this is what I'm saying. It like to me, I read it maybe it's up to 12 times I read that press release. Because like I every time I read it, I was like, oh my God, this means this. This means they could do that. Holy are you all after? Yeah, yeah. Holy shit. Do whatever you want. You know, this is a big deal. And I, you know, uh coming in today today, I was like super stoked to kind of just like riff on this because this is the first chance I've had um to actually like you know talk openly about it in a in a quasi-public uh forum. And and I just think it's a big deal, man.
SPEAKER_03So in Jamie, which in Jamie Diamond we trust, would you say?
SPEAKER_00Well, listen, I'm a I'm a Jamie Diamond ophile, whatever. Um he's uh he's a god among men uh in the financial world. Um uh you know, uh but I mean I think, you know, uh again, it's the largest financial institution in the world. He's been very fintech forward. He's invested billions and billions of dollars. They're running way ahead of the pack. I mean, if you look at Tier One financial institutions, I mean, there's now separation between JPM and everybody else. I mean, they're just so again, this is an opinion, but I mean, just so forward-leaning and into this. I gotta agree with that.
SPEAKER_03Yeah, I watch a lot of the stock market channels and podcasts. He's everywhere. Everywhere I turn, Jamie Diamond's on on another show, on another podcast talking about all this.
SPEAKER_02I've got a quick question, Adam. You you mentioned earlier that you know what might be a result of this is that every merchant who already has, you know, a routing number, they've got their bank account that they're set up with their processor, but now they're gonna have a wallet. Digital wallet. Right, a digital wallet. Can you talk about that? I mean, is that gonna be is this merchant gonna have to understand? Because I feel we talked about this a little bit already, that the consumer understanding, and even the merchant, right? Your mom and pop merchant, they're basically consumers when it comes to stable coins.
Tokenized Deposits And The Credit Rail Advantage
SPEAKER_03We're all consumers, exactly. That's a good point because I just had a conversation this morning with a client of ours kind of explaining things, digital wallets, and because there's different rules in a plan of the type of wallet, whether it's a staged wallet or passed or whatever the case may be. But yeah, go ahead.
SPEAKER_00Um You know, I I think I think this is where there's still a lot to play out. But I think this is where um sponsored banks and then the FIS and the FISERS and the other um core providers, solution providers, become very relevant to the conversation. Um I think on the point of sale front, I mean this there's there's some real questions here. I mean, uh there's plenty of people in the industry who would say that this is an existential threat to the card networks. I mean, truth be told, uh I mean, you show me anybody who knows exactly what the um cost basis is for interchange, yeah. Okay, and I'll show you a liar. Right. Exactly.
SPEAKER_02That is a black box. Yeah.
SPEAKER_00Um, nobody knows. And that's how they like it. And that's how they like it. So we don't know, but um, you know, we're talking about fundamentally a completely different technology to transfer value um electronically. And I there are a lot of questions that remain, but I do think it's gonna be a piece. I don't think that it replaces anything. I think people love choice. You know, um, they still love cash. Uh you know, they they love their credit cards, they love their rewards on the credit card. Uh, I think the younger generation definitely skews more towards non-credit products. I think they like to know exactly what their bank balance is all the time. So they prefer, you know, uh P2P payments using like Zell and Venmo, that kind of thing. Right. And they like their debit cards. And I think that's where you're gonna see, you know, as it relates to uh uh the consumer case or uh uh a B2C case, I think that's where you see um stable coin usage first. I also think it's it, you know, we we were we were kind of uh riffing a little bit on um Bitcoin um before. But I mean I I I think it it's de it's displaced the the meme coins in the conversation as being legitimate forms of value transfer in real life everyday commerce.
Will Merchants Need Wallets
SPEAKER_03I agree. And it's just those few coins that displace the meme because the meme coins, because the rest are truly meme coins. There's not a lot of functionality on a lot of things.
SPEAKER_00Yeah, value is based on um Bitcoin, I would argue, is based on a marketing campaign. Um, you know, people familiar with financial history, um booms and busts, I would argue that uh uh tulips have greater value than Bitcoin. And I'm probably gonna get smashed for that, but I don't care. Um, you know, this uh it is what it is, that's my opinion. It's a great conversation. But um oh yeah. I'm sure you can drag me back in here as soon as I go out, I'm gonna get bloody for that. Uh but uh I think stablecoin have uh they've won the war. And again, this is like a month ago, I would have said stablecoin has won the digital asset, um, cryptographic currency wars. Okay. Now I'm looking at this uh uh tokenized deposits and I'm like a whole new player. Good Lord, man. And this is only 30 days from you know, going back 30 days. Now we're here, I'm like, that's what's crazy.
SPEAKER_03This industry just is constantly evolving and so quickly.
SPEAKER_00And that goes back to your you know, the question you asked before about like the merchants and you know, even the ISOs out there, right? Right. You know, what are they thinking? And I think a lot of them are kind of like they're really they're trying very hard, and uh, I give them a lot of credit to try to just get their heads around it collectively. You know, you know, ultimately the ISOs need to want to know what you know, they need to service their merchants, right? You know, and the merchants are like asking questions and they're really good questions.
SPEAKER_03Like, I was just gonna bring this up. That's a crucial uh point. One thing I'm gonna I'm gonna predict is gonna be a real big issue with all this. It's there's so many players, right, in the in the chain, who's giving what information to the party beneath them, right? Like the ISA is saying something to their customers, the merchants have their own attorneys, the ISOs have their attorneys, everyone's kind of giving different information. Right. And that's where I think there might be some problems, is like the muddying of the waters.
SPEAKER_00I I think you're right. I I mean there are there is a level of complexity here. Um when you're you know you're take again, it's a brand new technology and you need to be connected to it. Uh you need to understand, you know, how does it flow into a lot of merchants use QuickBooks?
SPEAKER_01Yeah.
Networks’ Black Box And Consumer Choice
SPEAKER_00Okay. How how if I have uh bank accounts which are connected to the to my QuickBooks, I mean, how is my my my wallet my crypto wallet gonna be connected to QuickBooks?
SPEAKER_02Well that's kind of what I was gonna get at, Adam. You had mentioned so now a merchant has, you know, uh potentially is gonna have a wallet as well, right? Are they gonna know how to use it? Will they use it? They're gonna go to Adam. Who's who's responsible for educating them, right? Which is a major issue in the payments industry. There is very little education from the agent to the merchant, you know, from the ISO to the merchant, et cetera. And I in fact, when we had Anthony on, we thought it was, you know, pretty interesting looking at portfolios. He paid me to say that. Brought to you by Anthony Mouse. Yes, absolutely. He's one of our sponsors for the day. But yeah, no, it was it was you know, he brought to light how how little many people know about their own business.
SPEAKER_03Yeah.
SPEAKER_02Yeah. And and I think this just adds another layer of complexity, which I wonder, you know, who's where do you see that going? How do you see that playing out?
Stablecoins Versus Crypto Hype
SPEAKER_00Well, I I I think um uh the market rules. Okay. So if if people want to use it, then merchants are gonna have to take it. And so um it's not a question of it's not gonna be a question of should they, shouldn't they, do they want to, do they not want to? Um if if you're in business and you need to accept payment for goods or services and people want to pay this way, then you're taking it. Period. Um, you know, who's responsible? Uh that's a great question. I mean, ultimately, is it you know, are you know, if you think about an ISO today, I mean, can they have that conversation, you know, a meaningful, productive, thoughtful, uh, well-informed conversation with their merchant customers about how it will work when you have a wallet and have to accept these payments? I don't know. And that's not a knock on them. I mean, this stuff is literally unfolding in real time. Yep. And we're all trying to do our best. You know, my firm uh for our part, which we we try to I mean, I've I serve uh a different uh audience, I think, than my partner, like Anthony is you know, he's a banker, and my guy Eddie in LA, uh who runs our uh West Coast office, those are bankers. Um for me, I'm a strategist for the firm. And I am very forward-looking, um, six months, one year, three years out, uh, what's coming next so we can actually, so we can really provide value to our clients and and and try to answer these questions honestly and thoughtfully. But I mean, sitting here today, I don't know exactly how that works, who's gonna be responsible, what that conversation looks like. I think, you know, it's it's incumbent upon all of us in this ecosystem, in this community, just to, you know, be honest. You know, do you think this is real? Yes. Is it coming? Yes. How soon? Think it's already here.
SPEAKER_02Right.
Free Markets, Open Banking, And Regulation
SPEAKER_00You know, um, who should I talk to? Get on the phone, call Coinbase, call Circle, ask them about their products. How do they work? Because I do think there's also the possibility, again, that this wallet that merchants ultimately will have um is brought to them. It may be a different arrangement. It may not be through an ISO or the you know, uh, the Pfizer of the Global Payments, the FIS of the world. It may be direct with Coin Coinbase and Um Circle. Very interesting. Yeah, uh I go back to that conference a month ago. You know, there was a uh there was an analyst analyst there uh for equities, and I, you know, he was doing his presentation and he did this whole thing on you know the the big names that we all know. And I asked him this, you know, it was a very straightforward question. Do you think that next year you know you, your firm will initiate coverage on Coinbase and you know uh circle as payments companies. Payments companies. Now he answered in the negative, and I you know, I I just was curious as to what his answer would be. You know, I left there thinking that's not right, man. Um they are payments companies. We got new payments companies in the ecosystem um that are joining the party, and uh that is a reality. I think we need to accept it, we should embrace it. Um and uh again, I think uh free markets will take care of uh everything ultimately. Uh I look at open banking, that's kind of like that that has been like a case study in free market, you know, uh a free market solution with the whole, you know, JP Morgan is gonna charge the uh the big aggregators money for the API calls and stuff like that, and the open banking community freaks out and the crypto community freaks out, and there's a war of words and there's press releases going back and forth, they figured it out.
SPEAKER_02Exactly.
SPEAKER_00Okay, it wasn't for the government to step in and say, you know, you can charge, you can't charge, and if you do charge, it's as much. It were for the different parties involved in the transaction to figure out the market figured itself out.
SPEAKER_03Yeah, yeah.
SPEAKER_00Some form of equilibrium where everybody can, you know, you know, there was value provided, it costs X amount, we can live with this, we can live with this, and and there you go. I mean, it was a great example of free market forces kind of um uh you know sorting through a a morass and getting to a conclusion.
SPEAKER_02You love to see it. In 2025, free free market force is still at work. It's a big thing.
SPEAKER_00Yeah, I was at a family office conference this year, and it it's funny, like everybody's so bullish because you know, not getting political, but this administration is very hands-off, right? It's like you know, let businesses do what they do, they'll figure it out. Um, I think that was a good example of that. There are also cases where, you know, it's not so good. The government should step in and make sure protections are in place, uh, you know, for uh especially consumer protections.
SPEAKER_03But CFPB, for example. That that's a big one. Uh if you're familiar with that, yeah.
SPEAKER_00I mean uh a defamed. Yeah, a defamed CMP. Exactly why I brought it up. Yeah. Yeah. I mean, I don't I don't know if they're swinging a big bat these days, right? But uh it's a stick.
Who Should Reach Out And Why
SPEAKER_02It's a little stick. If that's still there, nominally. It's still there. Yeah. So uh feel free to jump in, Liu, but I was gonna ask Adam, who, you know, our audience is made up a lot of ISOs, people in the payments industry specifically. Obviously, if you know, it's all technology these days. Yep. Um who is it that you want reaching out to you, Adam? You've got obviously, like you said, I love how you put this. You're forward thinking, you're thinking about next year. People who have questions, who's your ideal uh client?
SPEAKER_03And just to add on to that, I was just gonna say the same exact thing. What's your biggest takeaway that you want to leave with our listeners? Where do you want people to reach out to you? What do you want them to take away from this? Yeah.
Personal Takeaways And Closing
SPEAKER_00So I I appreciate the opportunity to say that. You know, I I think as a firm, I I didn't do this earlier when I introduced myself and the firm, but um it's important to for me to say that, you know, we kind of operate in a unique sandbox. We're not we we are a low, lower middle market investment bank. Means that that the companies that we represent, you know, have enterprise that values of, you know, to kind of like put numbers or quantify it, between$10 million and$400 million. Um we're not, you know, Morgan Stanley or William Blair. Right. Um we work with smaller companies, uh typically not companies that are certain, not startup, not you know, venture seed, you know, Series A kind of stuff. Um but I I I think it's important, you know, if I'm if I'm pitching ourselves that um founders should know that we have expertise in that segment of the marketplace. And really what we try to do is, you know, it's really important to me as one of the founders to create value that's not always monetizable. Now, my other partners may shoot me for saying that. But you know, we want people to Anthony on the phone. Yes, yes. I'm sure it'll be a message in my phone, it'd be nothing. Um we want we want um people spanning the spectrum, you know, anybody whose business Involves the movement of money digitally. Okay. Is a potential client of ours, including software companies. And we want them to pick up the phone and ask questions because you know that's kind of my favorite thing. That's how we all learn. But being able to share our perspectives, our expertise. But you really see what people are buying, what they're interested in. And I think that's really important for founders across, you know, the entire fintech landscape. That's really good information for them. Because at the end of the day, the objective, I think, should be value creation in your business. You know, you shouldn't be thinking short-term profitability. Sometimes we all have to, you know, in the pandemic, we all had to retrench. So we had to run lean, we had to run uh run mean. Um, but you know, uh what we're really all trying to do is create value in the companies that we founded and that we continue to build. And just send an email, you know, and uh, you know, I'm always happy to chat. I you know, I don't really discriminate. I'm I'm more interested in these uh on the fringe vanguard type companies, uh, truth be told. But I mean, across the board and within our organization, I mean, I think it's fair to say that we love technology, um, especially financial technology. Broadly, our roots and our footprint in payments is is very well healed. Um, you'd be hard pressed to find any outfit, and uh, you know, I have no problem saying that, you would be hard pressed to find an outfit out there um that has the same expertise that we do in payments. I think it's uh we're very unique in that sense. And so, you know, like I said, um anytime anybody wants to discuss what's going on, uh we're always down for a phone call.
SPEAKER_03What I took from that was you can expect basically white glove service, personalized service.
SPEAKER_00I I think that's uh uh one of the things that we have the luxury of being able to provide our clients um given in the area of the marketplace that we work in. You know, once what you got in the the five billion dollar deals that the you know the b the the real middle market Wall Street banks are doing and stuff like that. I mean, they're working with armies. Yeah. You know, and the armies have different divisions and the different digits.
SPEAKER_03So you don't have that level of personalization with who you're working with. That's right.
SPEAKER_00I mean, when you when you you know, for the companies that we serve, you know, they get their own lead banker, they get their own deal team, and they have access not just to um uh you know uh management level, uh C level personnel, but also our executive advisors who are really, you know, they're they have deep roots in this industry and and they are tremendous resources um for anybody, especially, you know, the more the more peculiar, uh, the more niche a question is, maybe the harder it is is to even answer, uh the more we enjoy.
SPEAKER_03That's where you guys take it.
SPEAKER_00Yeah, I think that's where we, yeah, that that's that's our sandbox, man.
SPEAKER_03Well, look, man, this was a great conversation. I want to end it off with two things. One, I don't think you told them where they can reach you, like the specific email or specific contact info. And two, something I want to start doing with our podcast, Jeremy. Yeah, yeah. At the end of each podcast, I want to ask the guests one thing they're looking forward to. So either if it's a trip that's coming up, I don't know if a good movie you're gonna go watch, whatever the case may be, just let us know one thing you're looking forward to in the near future.
SPEAKER_00Okay. So uh as it relates to contacting myself, um, I think the simplest way to do it is just find me on LinkedIn, uh Adam T. Hark, uh uh Wellesley Hills Financial. Um because we kind of have a long domain name. Um, Link is probably easiest. It's too easy to misspell.
SPEAKER_03And I'll reach out to the reach out to us and we'll we'll give you the news content, whatever the case may be.
SPEAKER_00Um in the in in terms of things I'm looking forward to, uh, this is a very selfish thing. Um I love being right. All right. So um I want to see I want to see in the next 12 months, you know, where we are at the end of 2026 with stable coins, with the same thing.
SPEAKER_03It can't be work-related. It's gotta be a personal thing you're looking forward to. I gotta cut you off there. Oh, that is personal. I want to be right.
SPEAKER_01Yeah. All right.
SPEAKER_00Um, I I I think um for me personally, uh I I I take a lot of I'm a builder. Okay. Um, you know, when um people, especially uh people applying for like an internship or something like that, they say, why did you get in this business? You know, what is it that brings you into the office every day? What is it about your personality? I said, I like building things. And I like doing it with teams uh and my teammates. And I love my teammates. Um, I love what we're building, and you know, to be able to continue that trajectory is extremely fulfilling and rewarding. And um I'm looking forward to that. Cool in 2020.
SPEAKER_03We still tied it to work, but we'll let it slide.
SPEAKER_02Okay, so yeah, no, it is. It's it's a it's a great answer. Um, Adam, it's been a real pleasure having you on the podcast. Uh, this has been the Payments Experts Podcast, a podcast of Global Legal Law Firm in studio today, joining us uh transactional attorney Leo Arzdomanian, as well as our special guest, Adam Hark. He's the managing member over Wellesley Hills Financial. All the information you'll find down below. Gentlemen, it was great. We'll see you on the next one. Bye bye. Thank you. Thank you for listening to this episode of the Payments Experts Podcast, a podcast of Global Legal Law Firm. Visit us online today at Global Legalaw.com. Matters discussed are all opinions that do not constitute legal advice. All events or likeness to real people and events is a coincidence.