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The ongoing debate at the European level surrounding the centralisation of supervision for Crypto-Asset Service Providers (CASPs) inspired the publication of an article arguing that the thrust toward centralisation could undermine the critical balance between harmonisation and subsidiarity that forms an important part of the European constitutional framework.
The centralisation of CASP supervision has sparked discussions about regulatory efficiency, governance structures, and the value of national supervisory diversity.
The article, entitled 'Preserving national supervision of CASPs under MiCAR' was written by Chris Buttigieg, the chief officer for supervision at the local regulator, the Malta Financial Services Authority, and Ian Gauci, the managing partner of legal firm GTG. It was published in ERA Forum, the Journal of the Academy of European Law.
The authors examined the harmonisation opportunities presented by Markets in Crypto Assets Regulation (MiCAR) which are currently used by regulators in Malta and France.
They highlight "the importance of localised, tailored supervision, address the practical considerations of centralising supervision, emphasise the need for direct engagement with stakeholders, and propose pathways for achieving supervisory convergence without losing the benefits of national oversight".
The article concludes: "A more viable approach to achieving regulatory convergence and efficacy lies within the proposed framework of enhanced knowledge sharing in financial supervision. This model leverages existing supervisory tools under the ESA framework to promote collaboration, foster mutual trust among regulators, and facilitate the dissemination of best practices. It champions a bottom-up approach where national authorities retain autonomous yet aligned on broader EU objectives."
This argument had already been put forward by Prof. Buttigieg in an opinion piece published on 1 May 2025 in the Oxford Business Law Blog of University of Oxford. The full article can be accessed here: Preserving national supervision of CASPs under MiCAR | ERA Forum.
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