Rep. Sam Liccardo (D-CA) and Rep. Young Kim (R-CA) introduced the PACE Act (full acronym not yet officially released) on April 21, 2026, in the House of Representatives, where it has been referred to the House Financial Services Committee. The bill would amend federal law to allow qualifying nonbank companies, including crypto-native payment providers, to connect directly to Fedwire, FedACH, and FedNow: the core plumbing of the U.S. dollar settlement system. The crypto sector has signaled support for the measure, though specific backing firms have not been publicly named.

The Problem the Bill Is Trying to Fix

Right now, payment companies that lack a full banking charter cannot hold a Federal Reserve master account. A master account is essentially a direct line to the Fed's settlement rails. Without one, fintechs and crypto firms must route transactions through correspondent banks, a process that adds fees estimated at 0.5 to 2 percent per transaction, introduces settlement delays, and creates counterparty risk.

The courts have already clarified why legislation, rather than rulemaking alone, is necessary. Custodia Bank, a Wyoming-chartered crypto firm, lost its bid for a master account at the District of Wyoming in March 2024, and the Tenth Circuit upheld that decision in October 2025. Both rulings confirmed that Federal Reserve Banks have discretion, not an obligation, to approve master account applications. That precedent closed off the regulatory pathway and made an act of Congress the only reliable route to guaranteed access.

The PACE Act would create a legal pathway around that bottleneck.

The bill arrives alongside a shift already underway at the Federal Reserve itself. In October 2025, Fed Governor Christopher Waller floated the idea of a "skinny" master account at the Payments Innovation Conference: a stripped-down payment account for nonbanks that would allow settlement access without interest on reserves, discount window borrowing, or daylight overdraft privileges. These accounts would carry balance caps set at the lesser of $500 million or 10 percent of total assets. "We are well into a technology-driven revolution in payments," Waller said at the time.

The Fed followed that proposal with a formal Request for Information in December 2025, and it currently aims to have such accounts available to eligible institutions by late 2026.

The first concrete example of what that could look like came on March 4, 2026, when the Federal Reserve Bank of Kansas City approved a limited master account for Kraken Financial, a Wyoming Special Purpose Depository Institution (SPDI) and the first crypto firm to receive such access in U.S. history.

Fed Vice Chair Michelle Bowman described the approval as a "pilot" for testing nonbank participation in the payments system. "We need to think through whether there is a path for nonbank financial institutions to be part of the Federal Reserve System," Bowman said. "We're trying to learn."

Legislative Backdrop

Liccardo and Kim both previously co-sponsored the STABLE Act, a House bill establishing stablecoin issuance rules, giving them an established record on digital asset regulation. The PACE Act builds on that foundation and sits within a broader legislative wave. The GENIUS Act, signed into law on July 18, 2025, created the first federal framework for payment stablecoins and passed with strong bipartisan support: 68 to 30 in the Senate and 308 to 122 in the House. That law requires stablecoin reserves to be backed by deposits at a Federal Reserve Bank among eligible reserve assets, a provision that makes the question of Fed access directly relevant to how stablecoin issuers operate.

The stablecoin market is no longer a niche concern. Market capitalization crossed $305 billion by the end of 2025, up from roughly $150 billion at the start of 2024. Annual on-chain stablecoin transaction volume exceeded $33 trillion globally in 2025, according to Federal Reserve research published in March 2026.

Global Stakes: Africa and South Asia

The practical effects of the PACE Act would extend well beyond U.S. borders. Sub-Saharan Africa is the world's most stablecoin-active region relative to GDP. More than $205 billion in on-chain crypto value moved through the region between July 2024 and June 2025, a 52 percent year-over-year increase, with stablecoins representing 43 percent of all crypto transactions, according to a 2026 Transak report. Nigeria, Kenya, and Ethiopia are among the most active markets, and stablecoin payments already save users up to 85 percent compared to traditional remittance fees, which average 8.78 percent per transfer across Sub-Saharan Africa. The potential impact is amplified by a structural constraint: only 12 percent of intra-African transactions are currently processed domestically, meaning U.S. dollar settlement bottlenecks directly affect African payment corridors. If crypto payment providers gain direct access to Fed rails, those corridors could settle faster and at lower cost.

The receiving-end regulatory environment is also maturing. Nigeria's 2025 Investment and Securities Act brought crypto assets under formal oversight, and Kenya's Virtual Asset Service Providers Bill, enacted in October 2025, established a licensing framework for crypto businesses. These developments mean that improved U.S. dollar settlement infrastructure would reach markets increasingly equipped to use it. AML/CFT compliance nonetheless remains an open question for cross-border stablecoin corridors in the region, and that tension is directly relevant to the regulatory debate in Washington.

South Asia presents a parallel case, with comparable remittance scale and unresolved infrastructure gaps. India received $129 billion in remittances in 2024, much of it originating from the U.S. diaspora and still routed through SWIFT or hawala networks that carry fees of $10 to $35 per transfer and delays of two to five business days. India's Unified Payments Interface (UPI) processes roughly 18 billion transactions per month domestically, but it lacks native cross-border settlement capability, meaning foreign exchange legs continue to run through correspondent banks. A direct Fed connection for stablecoin payment providers could create a viable corridor linking UPI-based payments to Fedwire settlement, cutting costs and delays significantly. Nonbank payment providers covered under the PACE Act could settle the U.S. dollar leg of those transfers directly at the Fed, removing correspondent bank intermediaries from the equation entirely. Pakistan and Bangladesh, both major remittance-receiving economies in the South Asian corridor, face the same correspondent bank constraints and would stand to benefit from the same improvements.

What Comes Next

The PACE Act faces the standard legislative path through the House Financial Services Committee before any floor vote.

The Fed is already stress-testing nonbank master account access in practice. On March 4, 2026, the Federal Reserve Bank of Kansas City granted Kraken Financial an active limited master account, making it the first crypto-native firm to achieve that status. Three additional crypto-native firms, WisdomTree Digital Trust, Standard Custody and Trust, and Commercium Financial, have pending applications currently under review. Congress is essentially being asked to codify a process that regulators have already begun.

Not everyone is on board with the direction of travel. Former Fed Governor Michael Barr raised concerns about the skinny master account proposal in December 2025, arguing the accounts lack "adequate protections against the accounts being used for money laundering and terrorist financing by institutions we do not supervise." Those concerns carry particular weight for corridors involving West Africa and South Asia, regions where the Financial Action Task Force has flagged elevated illicit finance risks and where AML/CFT compliance frameworks are still developing. The American Bankers Association has separately warned that broad nonbank access to Fed rails puts $6.6 trillion in bank deposits at risk of migration.

The FDIC is simultaneously accepting public comments on GENIUS Act implementation rules through June 9, 2026, keeping the broader stablecoin regulatory framework in active development on a parallel track.