The European Union is debating changes to its Markets in Crypto-Assets (MiCA) framework, including whether supervisory power should move from national regulators to an EU-level body. Mögelin’s argument draws on precedent: European derivatives rules, known as EMIR, already showed what happens when supervision centralizes. “With a centralised supervisor, one might assume the application and understanding of specific provisions also becomes somewhat centralised,” he said — meaning crypto-asset service providers could lose flexibility in how individual provisions are applied to their specific business models.
His advice was pointed: “Market participants and clients should decide what they consider beneficial, because these firms currently go through an authorisation process, and shifting responsibility to a centralised entity might add burdens regardless of the outcome.” The MiCA consultation underpinning this debate has been extended to September 30 — leaving only days for stakeholders to weigh in.
- One license, 30 countries — MiCA’s passport lets firms authorized by one national regulator operate across the European Economic Area
- September 30 — the extended deadline for the MiCA consultation now driving the centralization debate
- 194 to 138 — the September House of Lords vote backing a UK digital asset strategy amendment
The Passport System Works — Until the Rules Fork
Under the current system, a crypto firm gets authorized by its home national regulator and passports that approval across the bloc. Ripple illustrates the model’s appeal: in July it secured MiCA authorization from Luxembourg’s Commission de Surveillance du Secteur Financier, paired with an electronic money institution license, enabling regulated crypto payment services across 30 European Economic Area countries without separate approvals in each one.
But Mögelin flagged a deeper structural gap that centralization would not fix: most EU member states still lack a private-law framework for crypto assets. Financial-services rules govern how exchanges and custodians must behave — but questions of who legally owns a token, how it transfers, and how creditors treat it in an insolvency remain governed by divergent national law. Without common treatment, the same token could fall under different ownership or insolvency rules depending on which country’s court hears the dispute.
The United Kingdom is tackling similar questions on its own track. In September, the House of Lords backed a digital asset strategy amendment by 194 votes to 138. The proposed strategy would cover crypto assets, stablecoins, tokenized securities and digital settlement systems, with the Treasury required to publish it within 12 months of Royal Assent — though the bill must still clear the House of Commons first.
What This Means for Your Wallet
If you use a European exchange or hold crypto through an EU-licensed custodian, this debate is not academic. A centralized supervisor could mean more consistent treatment across the bloc — or, in BaFin’s view, slower decisions, more paperwork, and rules applied rigidly to business models they were never designed for. For firms, it could mean redoing compliance work they have already finished. For users, the practical question is whether your provider’s home regulator gets stronger or gets sidelined.
Mögelin also touched on a topic with direct consumer relevance: e-money tokens — the MiCA category covering stablecoins pegged to an official currency. He said the convergence of crypto firms and traditional finance has increased interest in using e-money tokens as the cash side of tokenized securities settlements, because a trade only truly completes when both the asset leg and the payment leg settle — and a blockchain asset paired with a slow bank transfer creates delay risk. Regulators, he noted, are discussing whether services involving e-money tokens could extend to credit or lending, which could eventually shape how Europeans borrow and settle against stablecoin balances.
The Verdict
BaFin is not calling for national regulators to be cut out — Mögelin explicitly said even a centralized supervisor could benefit from member-state expertise. The warning is narrower but important: Brussels should not assume that consolidating power consolidates competence. With the MiCA consultation closing September 30 and Europe’s crypto industry watching closely, the EU faces a choice between harmonized supervision and the flexibility that let firms like Ripple passport across 30 countries in the first place. The burden of getting this wrong, as Mögelin made clear, falls on the firms — and ultimately on their customers.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
One of Germany’s top financial regulators has pushed back against plans to centralize European crypto supervision, warning that moving MiCA oversight from national authorities to a single EU-level watchdog could pile new burdens on crypto firms without clear benefits.
By Maria Rodriguez | September 19, 2026
Speaking on a panel at the European Blockchain Convention, Stephan Mögelin of Germany’s Federal Financial Supervisory Authority, better known as BaFin, cautioned that a centralized supervisor would still depend on the local market knowledge held by national regulators — and that shifting responsibility after companies have already completed national authorization procedures could create additional work for everyone involved.
Why Centralized Supervision Worries BaFin
The European Union is debating changes to its Markets in Crypto-Assets (MiCA) framework, including whether supervisory power should move from national regulators to an EU-level body. Mögelin’s argument draws on precedent: European derivatives rules, known as EMIR, already showed what happens when supervision centralizes. “With a centralised supervisor, one might assume the application and understanding of specific provisions also becomes somewhat centralised,” he said — meaning crypto-asset service providers could lose flexibility in how individual provisions are applied to their specific business models.
His advice was pointed: “Market participants and clients should decide what they consider beneficial, because these firms currently go through an authorisation process, and shifting responsibility to a centralised entity might add burdens regardless of the outcome.” The MiCA consultation underpinning this debate has been extended to September 30 — leaving only days for stakeholders to weigh in.
- One license, 30 countries — MiCA’s passport lets firms authorized by one national regulator operate across the European Economic Area
- September 30 — the extended deadline for the MiCA consultation now driving the centralization debate
- 194 to 138 — the September House of Lords vote backing a UK digital asset strategy amendment
The Passport System Works — Until the Rules Fork
Under the current system, a crypto firm gets authorized by its home national regulator and passports that approval across the bloc. Ripple illustrates the model’s appeal: in July it secured MiCA authorization from Luxembourg’s Commission de Surveillance du Secteur Financier, paired with an electronic money institution license, enabling regulated crypto payment services across 30 European Economic Area countries without separate approvals in each one.
But Mögelin flagged a deeper structural gap that centralization would not fix: most EU member states still lack a private-law framework for crypto assets. Financial-services rules govern how exchanges and custodians must behave — but questions of who legally owns a token, how it transfers, and how creditors treat it in an insolvency remain governed by divergent national law. Without common treatment, the same token could fall under different ownership or insolvency rules depending on which country’s court hears the dispute.
The United Kingdom is tackling similar questions on its own track. In September, the House of Lords backed a digital asset strategy amendment by 194 votes to 138. The proposed strategy would cover crypto assets, stablecoins, tokenized securities and digital settlement systems, with the Treasury required to publish it within 12 months of Royal Assent — though the bill must still clear the House of Commons first.
What This Means for Your Wallet
If you use a European exchange or hold crypto through an EU-licensed custodian, this debate is not academic. A centralized supervisor could mean more consistent treatment across the bloc — or, in BaFin’s view, slower decisions, more paperwork, and rules applied rigidly to business models they were never designed for. For firms, it could mean redoing compliance work they have already finished. For users, the practical question is whether your provider’s home regulator gets stronger or gets sidelined.
Mögelin also touched on a topic with direct consumer relevance: e-money tokens — the MiCA category covering stablecoins pegged to an official currency. He said the convergence of crypto firms and traditional finance has increased interest in using e-money tokens as the cash side of tokenized securities settlements, because a trade only truly completes when both the asset leg and the payment leg settle — and a blockchain asset paired with a slow bank transfer creates delay risk. Regulators, he noted, are discussing whether services involving e-money tokens could extend to credit or lending, which could eventually shape how Europeans borrow and settle against stablecoin balances.
The Verdict
BaFin is not calling for national regulators to be cut out — Mögelin explicitly said even a centralized supervisor could benefit from member-state expertise. The warning is narrower but important: Brussels should not assume that consolidating power consolidates competence. With the MiCA consultation closing September 30 and Europe’s crypto industry watching closely, the EU faces a choice between harmonized supervision and the flexibility that let firms like Ripple passport across 30 countries in the first place. The burden of getting this wrong, as Mögelin made clear, falls on the firms — and ultimately on their customers.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
Mogelin citing EMIR is the strongest part of this. we already watched centralized supervision slow derivatives filings, no reason MiCA would be different
Passporting across 30 EEA states already works under MiCA. Moving the whole thing to one EU body months after firms finished national authorization is just making everyone refile paperwork for nothing.
exactly, we spent two years on national licenses. now a rethink with weeks left on the clock? bailiffs of bureaucracy eating their own tail
dual filing gang here too, our compliance budget is burning on pure what-ifs at this point. mogelin saying it out loud was refreshing honestly
weeks left and Mogelin is fighting the org chart instead of the calendar. meanwhile half the firms i know are maintaining dual filings just in case this goes either way
dual filings are the hidden tax of this whole fight. somebody should total up what the org chart ambiguity has cost firms in compliance spend since the debate started
BaFin pushing back on Brussels. didnt have that on my 2026 bingo card
BaFin defending national competence is the oldest play in german politics tbh. they just dont want to hand supervisory clout to a brussels body they barely control
the ripple passport example is doing a lot of work here. one bad home regulator and your whole eu operation stalls overnight
one hostile home regulator was always the weak point of passporting, but with 27 authorities you can at least relocate. a single EU watchdog with a bad year means nowhere to run
the home regulator risk is exactly why i would keep some national overlay. one bad actor state shouldnt sink the eu operation, but neither should one brussels office
Mogelin has a point. A centralized supervisor still needs national staff to enforce anything on the ground, and EMIR already showed the cost of that extra layer.
the EMIR comparison is doing heavy lifting here and it holds up. we watched centralized derivatives supervision add reporting layers without speeding anything up. why would MiCA be different
reporting layers without speed is the whole EMIR story in one line. adding a brussels office on top wont suddenly make filings faster
weeks left on the clock and they are still arguing about org charts. firms just want to know who signs off
The EMIR point is underrated. We measured it: centralized derivatives reporting added roughly 20 percent to our filing overhead with zero speed gain. MiCA redoing that with weeks left would be a gift to no one except consultants.
firms just finished national authorization and now the goalposts might move again. mogelin is right that local market knowledge lives with the national regulators
weeks left on the clock and they are still fighting over who holds the pen. peak brussels energy
peak brussels energy is right. we just finished the BaFin authorization paperwork and now they want to reshuffle the whole table with weeks to spare
same boat, finished our BaFin authorization in july. redoing this at EU level would burn another year of compliance spend for zero customer benefit
same, our BaFin authorization landed in june. reshuffle supervision now and every firm dual files straight through next spring, minimum
weeks left on the clock and nobody can even name the watchdogs remit. firms deserve better than org chart roulette
To be fair to Mogelin, his point about local market knowledge is the strongest one. Language, banking ties, actual enforcement history, none of that transfers to a Brussels desk overnight.
weeks left on the clock and the fight is about who gets an office building in brussels. passporting works, dual filings work-ish, touch it after the deadline like adults
touch it after the deadline is the only sane sequencing. redrawing the org chart mid countdown just guarantees dual filings for another full year
BaFin framing this as concern for firms while protecting its own supervisory relevance. Both can be true. But weeks before the deadline is the worst possible moment to redraw the org chart.
weeks before the deadline and the single watchdog debate is still going. every firm i know is hedging by keeping both filing tracks alive, which is exactly the cost mogelin warned about
the local knowledge point is stronger than brussels admits. a single desk that cant read BaFin enforcement history or banking ties is just theater with a budget