The Payments Access and Consumer Efficiency (PACE) Act, introduced April 21, 2026, by Representatives Young Kim (R-CA) and Sam Liccardo (D-CA), proposes granting qualified nonbank payment providers — including stablecoin issuers and crypto payment firms — direct access to Federal Reserve payment ...
"We can reduce the burden of bank fees borne by too many American families by enabling broader access to innovative payment systems." — Rep. Sam Liccardo (D-CA), Co-sponsor of the PACE Act
The Payments Access and Consumer Efficiency (PACE) Act, introduced April 21, 2026, by Representatives Young Kim (R-CA) and Sam Liccardo (D-CA), proposes granting qualified nonbank payment providers — including stablecoin issuers and crypto payment firms — direct access to Federal Reserve payment infrastructure. The bill targets Fedwire, FedNow, and FedACH, the three core settlement systems that underpin the U.S. payments architecture.
The legislation creates a new federal category called "registered covered provider," administered by the Office of the Comptroller of the Currency (OCC). Applicants must hold money transmitter licenses in at least 40 states, maintain 1:1 reserves in liquid assets, and meet Bank Secrecy Act compliance requirements. In exchange, they receive "payments reserve accounts" at Federal Reserve Banks — a form of limited-access master account that bypasses the traditional requirement to hold a full bank charter.
The economic implications are substantial. The Federal Reserve charges $0.045 per FedNow instant payment and approximately $0.97 per Fedwire funds transfer ($0.156 at high volume tiers). Banks currently charge consumers $25–$50 per domestic wire transfer. Nonbank providers that access these rails directly would eliminate the intermediary markup, compressing payment costs by orders of magnitude. The bill has drawn endorsements from the Financial Technology Association, Blockchain Association, The Digital Chamber, and the Crypto Council for Innovation — and immediate opposition from banking trade groups.
The PACE Act establishes a voluntary federal registration framework for nonbank payment service providers. Section 3 of the bill defines a "registered covered provider" as a firm that meets the following criteria:
The OCC would serve as the primary federal regulator, with set review deadlines for applications. The Federal Reserve Board retains final approval authority over payments reserve account access. Section 9 of the bill directs that account access "should be granted in the same manner and to the same extent as for insured depository institutions."
The bill does not grant bank charters to participating nonbanks. It does not extend FDIC deposit insurance. It creates a narrow pathway to payment infrastructure access without conferring full banking privileges.
The economic case for the PACE Act rests on the gap between what the Federal Reserve charges for payment services and what end users pay after bank intermediation.
Federal Reserve fee schedule (2026):
What consumers pay through banks:
The markup from Fed cost to consumer price ranges from 25x to 500x, depending on the service and channel. The PACE Act's stated goal is to allow qualified nonbank providers to access these rails directly, eliminating the intermediary layer that generates this spread.
For stablecoin issuers and crypto payment firms currently routing through sponsor banks, the bill would remove what amounts to a toll. Sponsor bank relationships currently require nonbank firms to pay access fees, per-transaction markups, and compliance overhead costs to their banking partners. Firms like Rain and Reap have pursued direct Visa principal membership to collapse this intermediary stack; the PACE Act would do the same for Fed payment rails.
The 40-state license requirement serves as a de facto maturity filter. Obtaining money transmitter licenses across 40 jurisdictions requires years of compliance investment, capital reserves, and regulatory relationships.
Firms likely to meet this threshold include established money service businesses, major fintech payment providers, and large stablecoin issuers. Circle, which received a conditional OCC national trust bank charter in late 2025, already holds licenses across the majority of U.S. states. Ripple, Paxos, and several other firms that received OCC conditional approvals in December 2025 and early 2026 would also be in scope.
Early-stage crypto startups, DeFi protocols, and smaller fintech firms would not qualify. The threshold functions as a barrier that restricts access to firms with established compliance infrastructure — a deliberate design choice to address banking industry concerns about systemic risk.
The PACE Act arrives alongside — but distinct from — the Federal Reserve's own "skinny master account" initiative. In October 2025, Fed Governor Christopher Waller proposed a limited-access payment account for eligible depository institutions. The Fed Board issued a Request for Information in late 2025, with comments due February 6, 2026.
Key differences between the two frameworks:
| Feature | PACE Act | Skinny Master Account | |---|---|---| | Eligible entities | Nonbank payment providers with 40+ state licenses | Eligible depository institutions only | | Authorizing body | Congress (legislation) | Federal Reserve Board (regulation) | | Oversight | OCC registration | Fed supervision | | Account type | Payments reserve account | Skinny master account | | Services | Fedwire, FedNow, FedACH | Fedwire, FedNow, NSS, Fedwire Securities (free transfers only) | | Balance cap | Not specified in bill text | Lesser of $500M or 10% of total assets | | Discount window | Not available | Not available | | Target timeline | Legislative process (uncertain) | Final rule targeted Q4 2026 |
Governor Waller explicitly stated that fintechs would not be eligible for skinny master accounts: "You've got to be an eligible depository institution." The PACE Act fills this gap by creating a legislative pathway for nonbanks specifically.
The two initiatives are complementary rather than competitive. If both proceed, the result would be a two-track system: skinny accounts for crypto-adjacent banks and special-purpose depository institutions, and PACE Act registration for nonbank payment firms.
The PACE Act's existence is partly a response to the failure of litigation-based approaches to Fed access. Custodia Bank, a Wyoming special-purpose depository institution founded by Caitlin Long, spent four years attempting to obtain a Fed master account through the courts.
The timeline of defeats:
The courts established that federal law does not require the Federal Reserve to grant master account access to every eligible depository institution. The Fed retains discretion. This precedent made clear that expanded access to Fed payment rails would require either new regulation (the skinny master account) or new legislation (the PACE Act).
The Government Accountability Office documented over 200 instances of banks debanking crypto-related clients since 2018, underscoring the structural exclusion that the PACE Act aims to address through a legislative mandate rather than judicial order.
The American Bankers Association (ABA) has urged regulators to proceed cautiously on nonbank Fed access, citing consumer protection risks and systemic stability concerns. The Bank Policy Institute (BPI) has pushed back against provisions that would allow nonbanks to operate on Federal Reserve infrastructure without the full prudential framework that applies to chartered banks.
The banking industry's core objection: registered covered providers under the PACE Act would access the same payment rails as banks without carrying the same regulatory burden — no capital adequacy requirements (beyond 1:1 reserves), no FDIC insurance, no Community Reinvestment Act obligations, and no Fed stress testing.
From the banks' perspective, this creates an asymmetric competitive landscape. Wire transfer fees, ACH batching margins, and payment processing revenues represent significant income streams for commercial banks. Direct Fed access for nonbanks threatens to compress these margins.
The bill now heads to committee, where banking lobby opposition is expected to intensify. The legislative path will depend on whether the bipartisan coalition (Kim from the Republican side, Liccardo from the Democratic side) can hold against industry pressure.
The PACE Act enters a crowded crypto-regulatory landscape in Congress:
Liccardo's voting pattern — supporting the GENIUS Act, opposing the CLARITY Act, and co-authoring the PACE Act — reveals a preference for payments-infrastructure legislation over securities-framework approaches. The PACE Act complements the GENIUS Act: where GENIUS defined what a payment stablecoin is, PACE would define how stablecoin issuers connect to the settlement layer.
The PACE Act's most immediate beneficiaries would be stablecoin issuers with established state licensing portfolios. Direct Fed access would allow these firms to:
For firms like Circle (USDC) that process billions in daily redemptions and issuances, the cost savings from eliminating sponsor bank intermediation could be material. The bill would also reduce counterparty risk: holding reserves at the Fed eliminates exposure to commercial bank failure.
The broader structural effect would be to position regulated stablecoin issuers as direct participants in the U.S. payment system rather than tenants of the banking system. This shifts the competitive dynamic — stablecoin rails would operate at near-Fed-cost rather than at bank-markup prices.
The PACE Act represents a structural challenge to the bank-intermediated payments model that has governed U.S. financial infrastructure for decades. By creating a statutory pathway for nonbank providers to access Fed settlement systems, the bill would remove the economic rent that commercial banks extract as intermediaries between the Federal Reserve and end users.
The legislation is narrow in scope — it addresses payment rail access only, not asset classification, securities regulation, or stablecoin issuance standards. That narrowness may be its strength. Unlike the stalled CLARITY Act, the PACE Act does not require resolving the commodity-versus-security debate. Unlike the GENIUS Act, it does not define new asset categories. It simply asks: should qualified, regulated payment firms be allowed to connect directly to the systems that move money?
The answer will depend on whether Congress views Fed payment access as a banking privilege or a regulated utility. The PACE Act bets on the latter. If enacted, it would mark the first legislative mandate granting nonbank crypto-adjacent firms direct access to the Federal Reserve's settlement infrastructure — a shift in the plumbing of American finance that would redistribute billions in intermediation fees.