A senior official from Germany’s financial regulator has warned that shifting to centralized EU crypto supervision could increase compliance costs and reduce flexibility under MiCA rules. The concern comes as the European Commission reviews the framework and considers giving ESMA a stronger supervisory role.
Stephan Mogelin, Lead Senior Officer at Germany’s Federal Financial Supervisory Authority (BaFin), 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 warned that 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.
Under current MiCA rules, crypto-asset service providers obtain authorization from the relevant authority in their home member state. After authorization, they can offer services throughout the EU via the passporting system.
The European Commission proposed a supervisory package in December 2025 that would give ESMA direct supervision of crypto-asset service providers. The goal is to mitigate fragmentation of EU financial markets.
According to the Commission, the supervisory action aims to ensure regulatory consistency within the EU. Mögelin argued that local knowledge held by national regulators remains relevant even under centralization.
The matter is under review as part of the MiCA consultation, which remains open until 30 September 2026.
MiCA provides a uniform licensing framework for exchanges, custodians, and other crypto-asset service providers. The passport enables licensed entities to serve customers across all 30 EEA member states.
Ripple obtained its full Crypto-Asset Service Provider license in Luxembourg through the CSSF in July 2026.
Mogelin also pointed to private-law issues that financial regulations do not address. A financial regulation license dictates how a firm operates but does not determine token ownership or address insolvency questions related to crypto assets.
He said a private-law regime for crypto assets within Europe would help reduce fragmentation, as the same assets may face different ownership and insolvency rules across EU countries.
On e-money tokens, Mogelin noted that under MiCA rules, such tokens must stabilize their value by tying to a single official currency. E-money tokens may provide the payments aspect of tokenized transactions.
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.
