Bipartisan PACE Act Seeks Fed Rail Access for Crypto Firms

• Bipartisan PACE Act would let qualified payment firms seek access to Fed payment rails.
• Lawmakers said the crypto bill could reduce payment delays and lower costs for users.
• The measure includes consumer safeguards and supports access for qualified nonbank firms.

U.S. Representatives Young Kim and Sam Liccardo introduced a crypto bill on Thursday. The measure would let qualified payment firms seek direct access to Federal Reserve payment rails. Lawmakers said the proposal is meant to speed up payments and reduce costs for consumers and small businesses.

The bill is called the Payments Access and Consumer Efficiency Act, or the Bipartisan PACE Act. The lawmakers announced it in a press release. They said the current payment system has too many layers.

Bipartisan PACE Act Backs Faster Payment Access

According to the release, those layers slow money transfers and raise costs. The sponsors said the crypto bill would address that problem. It would allow qualified providers to access federal payment systems directly.

Lawmakers said direct access could reduce delays in payments. They also said it could lower fees for users. The bill is part of a wider push to modernize payment infrastructure.

Rep. Sam Liccardo said broader access to innovative payment systems could reduce the burden of bank fees. He said the goal is to support services that are cheaper, faster, and more reliable. His comments framed the measure as a payment reform proposal.

Several industry groups have endorsed the crypto bill. These include the Financial Technology Association, the Blockchain Association, the Digital Chamber, and the Crypto Council for Innovation. Their support adds industry backing as the proposal enters Congress.

Summer Mersinger, chief executive officer of the Blockchain Association, said crypto payment companies have long been locked out of the same infrastructure their competitors could use. She said the Bipartisan PACE Act would allow qualified nonbank providers to obtain direct access to Federal Reserve payment rails.

The proposal is especially relevant for firms such as Ripple and Circle. Both companies are waiting on the Federal Reserve’s proposed skinny master accounts. 

Kraken is currently the crypto firm that has secured a Federal Reserve master account. That makes it the only crypto company with direct access to the Fed’s payment infrastructure. 

The crypto bill also sets out a streamlined federal registration process. Qualified payment companies would apply under clear standards. The bill also includes review deadlines for those applications.

How Safeguards and Fed Oversight Shape the Bill

Consumer protection is another part of the proposal. Payment firms would have to fully back consumer funds. They would also need to keep those funds separate from company assets.

Consumers would receive priority in recovering funds if a company fails. The bill includes that safeguard alongside expanded payment access. Lawmakers said the structure is meant to protect users.

The Bipartisan PACE Act also recognizes skinny master accounts. At the same time, it gives the Federal Reserve Board final authority over those applications. 

The crypto bill arrives as another digital asset measure faces pressure in Washington. Its introduction comes amid a setback for the CLARITY Act. 

The proposal also enters a dispute between banks and the crypto sector over stablecoin rewards. Banks argue that such rewards could trigger deposit outflows from traditional institutions. Banking groups have also opposed giving crypto firms access to Fed payment rails.
Related: Sen. Thom Tillis Signals CLARITY Act Markup May Shift to May