A new bill in Congress would let large non‑bank payment firms — including major crypto intermediaries — plug directly into Federal Reserve payment systems, promising faster, cheaper settlement and a major shift in how dollars move in the U.S. financial system. What the PACE Act proposes - Direct access: Qualified non‑bank payment providers would be able to connect directly to Fed rails such as Fedwire, FedACH and FedNow, bypassing reliance on correspondent banks. - New federal category: The bill would create a “Registered Covered Provider” designation overseen by the Office of the Comptroller of the Currency (OCC). That status would give eligible firms a statutory right to apply for accounts at the Fed without obtaining a full bank charter. - Eligibility threshold: To qualify, companies would generally need either more than 40 state money‑transmitter licenses or a state depository charter — a test aimed at large payment processors, remittance platforms and major crypto firms already operating at national scale. - National passporting: The framework would effectively passport qualifying firms across all 50 states, replacing today’s costly, fragmented licensing process with unified federal supervision and reserve rules. Safety and reserve rules - 1:1 backing: Reserve requirements would require customer funds to be fully backed 1:1 in cash, Federal Reserve deposits, U.S. Treasury bills or tokenized equivalents — closely mirroring provisions in the recent GENIUS Act stablecoin framework. That approach is pitched as a way to give non‑banks access to central‑bank money while protecting customer funds. Industry and policy context - Positive early reaction: Fintech and crypto industry groups have reacted favorably, viewing the bill as a way to make the U.S. payments stack more competitive with private‑sector alternatives and other countries building real‑time rails. - Consumer framing: Supporters argue the bill will reduce the bank fees and delays that burden many consumers by enabling broader access to faster, cheaper payment systems. - Broader regulatory shift: If enacted, the PACE Act would sit alongside the GENIUS stablecoin rules and recent SEC moves on digital‑asset accounting as part of a broader reshaping of U.S. market plumbing — potentially enabling large crypto and payments firms to move dollars over Fed rails instead of relying solely on correspondent banking relationships. Why it matters for crypto - Direct Fed access could lower costs and settlement times for crypto firms that handle fiat on‑ and off‑ramps. - The alignment with GENIUS‑style reserve rules signals a move to bring non‑bank digital‑asset activity closer to centralized regulatory frameworks and central‑bank money. The PACE Act is still a proposal, but it represents a consequential policy push to modernize U.S. payments infrastructure and fold large non‑bank players, including crypto intermediaries, more directly into the country’s core payment rails. Read more AI-generated news on: undefined/news