Mastercard is under investigation by the UK’s Financial Conduct Authority (FCA) for alleged anti-competitive behavior linked to digital wallets. The news arrived as the payments giant joined JPMorgan, Ripple, and Ondo Finance in completing what it calls the first cross-border cross-bank redemption of tokenized US Treasury bonds.
Mastercard is not alone in the latest investigation by the Financial Conduct Authority (FCA), as the regulator is also investigating Visa and PayPal under the Financial Conduct Act (FCA). Competition Act 1998.
MasterCard and Visa are being investigated under Chapter One, which targets anti-competitive agreements, and Chapter Two, which deals with the abuse of a dominant position in the market. The investigation addresses contractual arrangements related to the financing and use of PayPal’s digital wallet.
The regulatory body stated that it has not yet reached any conclusions or made any findings indicating that the companies are violating any competition law. The investigation became public after PayPal disclosed in a Securities and Exchange Commission filing that it received notices in March about FCA inquiries into its contractual agreements with Mastercard and Visa.
A Mastercard spokesperson said they are cooperating and working with the regulator to ensure they meet competition law standards. Visa and PayPal also said they are collaborating as well.
Digital wallet use is increasing in the UK
The investigation follows a joint report issued by the Financial Conduct Authority (FCA) and the Payment Systems Regulatory Authority last year which cited competition concerns in the digital wallet market. Card transactions processed through digital wallets have been on the rise, with 2023 data showing a jump from 8% to 29%. PayPal allows users to host up to 24 cards in their wallet at no additional cost, making it attractive for more transactions.
Regulators have previously said they have heard calls to boost competition among wallet providers to allow new entrants and stimulate innovation.
In January 2025, the Competition and Markets Authority (CMA) opened a separate investigation into Apple and Google’s mobile ecosystems, including their digital wallets. The two tech giants reportedly made commitments to the CMA in February 2026 to improve fairness in App Store operations and enhance interoperability.
Across the Atlantic, Mastercard is helping tokenize Treasuries
Hours before the FSA’s announcement, Mastercard was part of a consortium that completed a pilot deal representing a different kind of financial infrastructure push. Ondo Finance, Kinexys by JPMorgan, Mastercard and Ripple (XRP) have implemented what they say is the first near-real-time cross-border redemption of a tokenized US Treasury fund.
The process reportedly began with Ripple redeeming part of its holdings in Ondo’s US Short-Term US Government Bond (OUSG) fund, which is housed in the XRP Ledger. Mastercard’s Multi-Token network operated the dollar-pegged payment.
JPMorgan’s Kinexys blockchain infrastructure then moved the funds through its correspondent banking network, resulting in the US dollar proceeds being settled into Ripple’s bank account in Singapore.
The fiat settlement aspect still moved through traditional banking paths, meaning the transaction was not fully decentralized.
“This achievement represents the first time that tokenized US Treasury securities have been settled across borders and banks in near real-time and outside traditional banking windows,” he said. Ian de BodyPresident of Ondo Finance.
Coding is still small but gaining momentum
Institutional interest is on the rise, along with overall value Distinctive real world assets (excluding stablecoins) It is worth about $31 billion globally. The Depository Trust and Clearing Corporation announced earlier this week that it will launch a tokenization service in October, with permission to tokenize Treasuries and bonds. Nasdaq said it is seeking tokenized trading of stocks and ETFs.
Regulatory clarity in this area remains the main obstacle. The House of Representatives has passed the Clarity Act, a market structure bill that would define US federal agencies that oversee different parts of the cryptocurrency market, but it is awaiting action from the Senate, where its future appears uncertain.
Mastercard’s stance embodies the tension running through global finance. In the UK, regulators are examining a company’s current payment arrangements for any potential competitive disadvantage. And in the US, it is building rails for a new category of financial infrastructure that UK regulators have been slower to address.
