BaFin Official Warns Centralized MiCA Oversight May Add Burdens

How Centralization Could Affect National Supervisory Practices

Stephan Mögelin, a senior official at Germany’s financial regulator BaFin, expressed concerns on September 18, 2026, that shifting crypto asset supervision to a centralized EU authority under MiCA could increase administrative burdens for firms and reduce national flexibility in rule application. His remarks highlight growing unease among national regulators about the proposed centralization of oversight for the EU’s Markets in Crypto-Assets regulation.

Mögelin argued that while harmonization aims to create a level playing field, transferring authorization powers to a single EU body might overlook national market specifics and slow down approval processes. He emphasized that BaFin and other national authorities have developed tailored approaches to crypto supervision that could be undermined by a one-size-fits-all model. The official stressed that flexibility is crucial for addressing emerging risks and innovation in a fast-evolving sector.

What Risks Do Firms Face Under a Centralized Model?

Mögelin pointed out that national supervisors currently adapt MiCA guidelines to local market conditions, such as varying levels of crypto adoption and existing financial infrastructure. A centralized system, he warned, might impose uniform procedures that do not account for these differences, potentially leading to inefficiencies. He noted that firms operating across multiple jurisdictions could face conflicting requirements if central rules are not properly aligned with national implementation.

According to Mögelin, the primary risk is increased compliance costs due to duplicated reporting or unclear jurisdictional responsibilities. He also cautioned that delays in authorization could hinder market entry for innovative crypto projects, especially startups lacking resources to navigate prolonged review processes. The BaFin official urged policymakers to preserve a degree of national discretion to ensure supervision remains both effective and proportionate.

Who is Stephan Mögelin and what is his role? Stephan Mögelin is a senior official at BaFin, Germany’s Federal Financial Supervisory Authority, involved in overseeing the implementation of MiCA regulations for crypto assets.

Frequently Asked Questions

Why does BaFin oppose full centralization of MiCA supervision? BaFin fears that centralization could reduce flexibility, increase administrative burdens on firms, and fail to account for national market differences in crypto adoption and infrastructure.

What alternative does BaFin suggest for MiCA oversight? BaFin supports maintaining a significant role for national supervisors in applying MiCA rules, allowing for tailored oversight while ensuring core EU standards are met.