A senior official at Germany’s Federal Financial Supervisory Authority (BaFin) has warned that moving supervision of crypto companies to a centralised European Union body could create extra work for firms and reduce regulators’ flexibility in applying the Markets in Crypto-Assets (MiCA) rules.
Stephan Mogelin said national regulators retained valuable knowledge of local markets and business models, even if some authorisation powers were transferred to an EU-level supervisor.
“What we’ve seen, for example, in the application of EMIR, is that with a centralised supervisor, one might assume the application and understanding of specific provisions also becomes somewhat centralised,” he said.
Mogelin was speaking during a panel at the European Blockchain Convention’s Day 2 briefing, which examined proposed changes to MiCA. He said centralisation could limit how flexibly individual rules were applied and create additional administrative work for companies that had already completed national authorisation procedures.
Under MiCA, crypto-asset service providers apply for approval from a national regulator and can then use the resulting passport to operate across the European Economic Area. The system provides a common licensing framework for exchanges, custodians and other providers, while national authorities continue to assess applications and supervise authorised firms.
In July, Ripple secured MiCA authorisation from Luxembourg’s Commission de Surveillance du Secteur Financier, allowing it to offer regulated crypto payment services in 30 European Economic Area countries. Ripple combined that crypto-asset service provider licence with an electronic money institution licence to support payment services involving crypto assets and stablecoins.
The EBC briefing said the MiCA consultation deadline had been extended to Sep. 30. Moderator Tommaso Astazi of Blockchain for Europe asked which parts of the framework needed changing and whether supervision should become more centralised.
Mogelin also highlighted gaps in the private-law treatment of crypto assets across EU member states.
“What’s still missing in most member states is a private law framework for specific crypto assets.”
Such rules cover ownership, transfers, contractual claims and what happens to assets if an intermediary becomes insolvent. Without a common approach, disputes could be governed by different ownership and insolvency rules in different countries. Similar questions arise with tokenised securities, where the blockchain record alone may not establish whether a holder owns a share, a beneficial interest or a contractual claim.
The United Kingdom is considering related issues outside MiCA. In September, the House of Lords supported a digital asset strategy amendment by 194 votes to 138. The proposed strategy would cover crypto assets, stablecoins, tokenised securities and digital settlement systems. The Treasury would have 12 months after Royal Assent to publish it, although the bill must still pass the House of Commons.
Mogelin said electronic money tokens could help provide the cash leg of transactions involving tokenised securities. Regulators are also considering whether related services could include credit or lending. Such tokens may help align blockchain-based asset transfers with conventional payment infrastructure, although similar questions in the United States sit between securities and payment regulation.
He did not call for national authorities to be removed from MiCA supervision, saying their expertise remained important and that firms should weigh any benefits of centralisation against the operational burden.
