Ripple holds over 50 money transmitter licenses, outpaces PACE Act requirements

PACE Act sets high threshold

The Payment Access to Cryptocurrency Entities (PACE) Act aims to provide a regulatory framework for digital asset companies connecting directly to Federal Reserve rails such as Fedwire, FedNow, and FedACH, without the need for a traditional bank charter. Under the bill, applicants must secure money transmitter licenses in at least 40 states, establish one-to-one reserves, comply with the Bank Secrecy Act, and register as a “covered provider” with the Office of the Comptroller of the Currency (OCC).

SMQKE emphasized that Ripple holds licensing in more than 50 states, including in New York and Texas. New York’s BitLicense is among the strictest licensing regimes for digital asset service providers and is widely regarded as a benchmark for robust compliance across the US. Companies holding the BitLicense generally face fewer obstacles obtaining similar approvals elsewhere.

Ripple’s portfolio of over 50 licenses means it already exceeds the bar set by the PACE Act, including recognition in New York and Texas, which are known for rigorous oversight.

Ripple’s licensing approach was designed to satisfy both federal and state requirements, which SMQKE argues enables the company to rapidly respond to regulatory changes if the bill passes.

Mini dictionary: PACE Act, US legislative proposal setting requirements for crypto companies to gain direct access to key Federal Reserve payment systems, including Fedwire and FedNow, by mandating extensive state-level licensing and compliance standards.

Messaging standards drive potential integration

A key technical factor supporting Ripple’s eligibility is its adoption of ISO 20022, a global banking format that standardizes data-rich messaging between payment systems. Both FedNow, the Federal Reserve’s instant payment platform, and the XRP Ledger utilize ISO 20022, which could allow for smooth interoperability between the two networks. According to SMQKE, this alignment streamlines the integration process, removing the main barrier for disparate financial systems to communicate in real time.

A payment system designed natively on ISO 20022 not only enables seamless data transfer but also processes transactions 24/7, making it align closely with FedNow’s expectations.

Traditional banking infrastructure frequently relies on older data formats that can limit transaction detail and delay processing through scheduled batch cycles. An ISO 20022-native blockchain bypasses these constraints, delivering truly real-time settlement capacities required by updated federal systems.

Mini dictionary: ISO 20022, an international standard for exchanging electronic messages between financial institutions, allowing for richer payment data and improved interoperability across different systems.

XRPL matches instant payment speeds

FedNow is engineered to settle payments within seconds, setting a high bar for any network seeking integration. SMQKE highlighted that the XRP Ledger, Ripple’s decentralized blockchain network, is capable of millisecond-level settlements, matching the real-time expectations of the Federal Reserve’s instant payment rails.

This performance metric has become an essential consideration as federal infrastructure modernizes. Blockchain projects hoping to participate must provide transaction finality at speeds comparable to existing systems.

PACE Act’s uncertain future

Although the PACE Act has bipartisan support and industry backing, it remains a bill in progress in Congress. Companies like Ripple, already compliant with the proposed standards, are likely to have an operational advantage if the legislation is enacted. However, the ultimate decision on any connection to Federal Reserve rails will require OCC approval and final passage through the legislative process.