Democrat Sam Liccardo and Republican Young Kim, members of the US House of Representatives, have introduced a new bill that would allow certain organizations direct access to the Federal Reserve’s payment services. The regulation in question was designed to create a faster and more cost-effective payment infrastructure for both individuals and companies. The bill, supported by leading organizations in the cryptocurrency industry, aims to build a bridge between financial technologies and traditional banking.
What changes with the PACE Act?
The Payments Access and Consumer Efficiency Act (PACE) consists of 23 pages in total and essentially provides a new audit framework for non-bank payment providers. Digital payment companies licensed in at least 40 states are planned to be included in the system, which will be managed by the US Office of the Comptroller of the Currency (OCC).
Under the law, a unified federal standard will be introduced in the registration process. In addition, the reserve ratios of payment services will be kept at a one-to-one ratio, and many obligations will be imposed, from risk management to record keeping. Thus, a more holistic approach will replace the current rules that vary by state.
If the bill becomes law, these companies will now be able to directly access Fedwire, FedNow and FedACH systems. This step paves the way for payment transactions to be made in a short time and at low cost.
First reactions from the industry
The proposal quickly gained support from leading organizations operating in the cryptocurrency and digital asset industry. Crypto Council of Innovation, known as the Innovation Council, is of the opinion that the regulation will increase competition in the market. CCI CEO Ji Hun Kim made the following evaluation in his statement:
The Council, in collaboration with Congress, wants to take action to advance responsible payment innovations and ensure Americans benefit from more secure and efficient payment methods.
Blockchain Association CEO Summer Mersinger described the proposal as “an important step forward.” According to Mersinger, when the PACE Act comes into effect, digital asset companies and payment platforms, which have not been able to directly access the central financial network to date, will now be able to participate in this infrastructure.
For a long time, digital asset payment companies were deprived of the financial infrastructure that their competitors had access to. Thanks to the PACE Act, organizations that meet the appropriate conditions will be able to access the Federal Reserve’s payment infrastructure and provide faster and more affordable solutions for both individual and corporate users.
With the proposed regulation, it is expected that the dependence on classical banking methods of money transfers within the USA will decrease. Thus, both consumers and enterprises will be able to benefit more from new generation payment systems.
Potential impacts for the US financial ecosystem
If the law comes into force, it could pave the way for innovation by expanding non-banking payment services widely. This situation may shake the position of traditional banks as the sole decisive actor in the market. Additionally, increasing financial inclusion may offer additional benefits, especially for cash-strapped groups.
Experts state that if the bill is accepted, the growth rate of cryptocurrency-focused payment companies and new entries into the market will increase.
