Overview: Account vs Token Rails
FedNow offers faster settlement within bank architectures; token rails offer open, programmable settlement with global reach. Preferences reflect institutional control vs user-centric openness.
Models and Access
FedNow is account-centric with bank-mediated access; token rails are open, programmable, and globally addressable. Integration paths differ in compliance posture and developer ergonomics.
Settlement Control and Compliance
Banks prefer rails where they control settlement windows, reversals, and compliance processes.
Economics: Fees and Funding
Existing fee structures and funding advantages map better to account rails than to open token networks.
UX Differences and Merchant Flows
Token rails offer instant finality and reduce reconciliation overhead; FedNow improves speed within incumbent architecture.
Tradeoffs: Openness vs Familiarity
FedNow delivers speed with incumbent control; token rails deliver openness with global reach. Choice depends on use case and compliance posture.
Conclusion
Preference for FedNow reflects institutional familiarity and economics, not necessarily user-optimality. Expect coexistence with token rails where they add value.