Well, you could create a widget and place it in 3D space to create the effect you are looking for. But honestly, I don`t think this is the best approach.
Making the password system should be just as easy as the text:
When each letter is interacted with by the player (by pressing the use key on the letters), you want to add a new character to a string “Typed Password” or something:
This way, the player is writing the password on that variable.
All you need to do now, is to test if the string is the correct password when its length is correct. If its the password, you can do whatever you want, else, you can reset the players typed string:
Cheers. 