A senior BaFin official has warned that centralized EU crypto supervision could raise costs for firms and reduce flexibility in applying MiCA rules. The comments come as the European Commission reviews the framework and considers a stronger supervisory role for ESMA.
Stephan Mogelin, Lead Senior Officer at Germany’s Federal Financial Supervisory Authority, raised the concern during the European Blockchain Convention in Barcelona. He said a central supervisor would still need knowledge held by national authorities, especially when dealing with local market conditions.
Mogelin also said transferring responsibility after firms complete national authorization could create more work. His concern centers on whether centralized MiCA supervision improves consistency without adding another compliance layer
How Could Centralized Supervision Change MiCA Rules?
At the moment, under MiCA, the crypto-asset service providers have to obtain authorization from the relevant authority in their home member state. After obtaining authorization, they will be able to offer the service throughout the EU via the passporting system under MiCA rules.
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The above arrangement places the regulators in each nation directly in charge of licensing and supervising the service providers. In addition, the approved provider is able to operate in several nations without having to obtain a separate license from each of those countries.
The Commission proposed a supervisory package in December 2025, which provides for direct ESMA supervision of the crypto-asset service providers with an intention of mitigating fragmentation of the EU financial markets.
According to the Commission, the supervisory action is geared towards ensuring regulatory consistency within the EU. Mögelin’s argument raises another consideration regarding the matter. The local knowledge held by national regulators still retains relevance in the case of centralization of the supervisory process.
The matter is one of the issues being discussed in the review of MiCA rules. The Commission’s specific consultation period is still on until 30 September 2026.
Why Does MiCA Passporting Matter for Crypto Firms?
MiCA provides a uniform licensing framework for exchanges, custodians, and other crypto-asset service providers. The passport enables licensed entities to provide services to customers from any country within the union using EU crypto laws.
A perfect example is Ripple, which got its full Crypto-Asset Service Provider license in Luxembourg through the CSSF in July 2026. This license means that Ripple can now offer crypto services in all 30 EEA member states.
The MiCA transitional period for Luxembourg came to an end on July 1, and according to the CSSF, crypto service providers must now operate with CASP licensing.
What Legal Gaps Remain Outside MiCA?
Moreover, Mogelin pointed out additional private-law issues that financial regulations do not answer.
A financial regulation license stipulates how a firm shall conduct its operations. However, it does not determine ownership of a token by default nor address insolvency questions related to crypto assets.
According to Mogelin, a private-law regime for crypto assets within Europe would help diminish the issue of fragmentation since, without a unified approach, the same assets may be subject to different ownership and insolvency rules in different countries of the EU.
It is also crucial in regard to tokenized securities, where blockchain infrastructure records the transfer of a token, whereas custody provisions and legal registration, in addition to securities law, define rights attached to the asset.
How Do E-Money Tokens Fit Into MiCA Rules?
In addition to the above, Mogelin mentioned e-money tokens and tokenized settlement. According to MiCA rules, an e-money token should have its value stabilized by tying itself to a single official currency.
E-money tokens may provide the payments aspect of a tokenized transaction. This comes into play in the case where securities go via blockchain technology whereas the payments are done via a traditional bank system.
Thus, the discussion expands beyond licensing. The MiCA regulations become related to issues of ESMA crypto regulation, private law, tokenized securities, and digital settlements.
Mogelin did not call for removing national regulators. Instead, he stressed the value of national expertise and questioned whether centralized supervision would justify the added operational burden.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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