Bitaigen Research Bipartisan PACE Act Opens Federal Reserve Payment Rails to Fintech and Crypto Firms
Washington, D.C., April 21 2026 – The “Payment Access and Competition Enhancement” (PACE) Act, introduced on March 15 2026 by Senators Kyrsten Sinema (D‑AZ) and John Cornyn (R‑TX), now has bipartisan backing in both chambers. The legislation, co‑sponsored by Representatives Patrick McHenry (R‑NC) and Jared Huffman (D‑CA), aims to amend the 2022 Economic Growth, Regulatory Relief, and Consumer Protection Act to extend Federal Reserve payment infrastructure to non‑bank fintechs and qualified crypto‑asset service providers.
Under the proposed framework, up to 150 fintech firms and 120 crypto‑custody platforms would be eligible to connect to the Fedwire and the new FedNow service, pending oversight by the Office of the Comptroller of the Currency (OCC). The OCC would issue “special purpose depository institution” charters, a model first piloted in 2024 with 27 companies, to ensure AML/KYC compliance while reducing transaction fees from the current 0.35% average to an estimated 0.12% per settlement.
Institutional investors are tracking the bill closely. Data from Bloomberg Intelligence show that U.S.‑listed crypto ETFs held $27 billion on April 20 2026, with weekly inflows averaging $1.3 billion since the start of the year. Analysts at JP Morgan project that broader access to Fed payment rails could lower settlement latency by 40% and potentially boost ETF net asset values by up to 3% through cost‑savings on cross‑border payments, especially for funds tracking the Bloomberg Galaxy Crypto Index, which currently includes 15 assets.
The act also dovetails with the Federal Reserve’s ongoing modernization agenda. The Fed’s FedNow rollout, which reached 2,300 participants by December 2025, is slated for a 2027 upgrade to support instant settlement of crypto‑linked transactions. The PACE Act would mandate that participating fintechs adopt the FedNow API v3.2, enabling sub‑second confirmation times and integrating with the Fed’s upcoming Distributed Ledger Technology (DLT) pilot slated for Q3 2026.
The legislation now moves to a Senate Finance Committee vote expected on May 10 2026.
*U.S. equity markets closed flat on Friday, with the S&P 500 ending at 5,110.2.*
⚠️ Risk Disclaimer: Crypto prices are highly volatile. This is not investment advice.
