BaFin official warns centralized MiCA oversight may add burdens

A BaFin official has warned that centralized EU crypto supervision could place extra burdens on firms while reducing flexibility in applying MiCA rules.

Centralized MiCA supervision could reduce flexibility

The European Blockchain Convention’s Day 2 briefing attributed the warning to Stephan Mögelin of Germany’s Federal Financial Supervisory Authority, or BaFin, during a panel on proposed changes to the Markets in Crypto-Assets framework.

Mögelin said centralized supervisors could still depend on knowledge held by national authorities, particularly when dealing with the characteristics of individual markets.

“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.

According to Mögelin, centralization could leave crypto-asset service providers with less flexibility when regulators apply individual provisions. Moving responsibility after companies have already completed national authorization procedures could also create additional work.

“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.”