ANALYSIS: Regulatory ‘Balkanisation’ risks disrupting global trade flows - ICE
3rd September, 2025|Luke Jeffs
The global financial system faces the threat of regulatory “balkanisation” as local regulators seek to promote their national interests, potentially creating new risks in the fast-moving world of cryptocurrencies, a senior exchange figure has warned.
Chris Edmonds, president of Fixed Income & Data Services at Intercontinental Exchange, discussed this week the current state of global regulation with International Swaps and Derivatives Association chief Scott O’Malia.
Speaking on the ISDA The Swap podcast, Edmunds said there is a real risk current regulators will increase the barriers to international trade by pursuing their own national interests.
Edmunds said: “If there’s a threat, it’s one of Balkanisation. Our industry spent three decades – some say more, some less – working on the globalisation of capital allocation.”
The ICE president suggested the industry has “done a pretty good job of that” but that progress may be under threat: “If I look at the tariff conversation in the current Trump administration, there’s a resetting of that certainly.”
Edmunds said: “If I look at the barriers … to operate in a given country, that’s an interesting conversation around “Are we inviting more investment or are we saying, no, we don’t want more investment?
“That may not be what we’re saying but that’s certainty the behaviour we have to fight through.”
The ICE president said an example is the European introduction in late June of the EMIR 3.0 active account requirement that mandates European firms to clear some Euro interest rate futures at European clearing houses.
“EMIR 3.0 in Europe is a constraint on the flow of capital, primarily as a fall-out of the UK exiting the US. The conversation between those two entities trying to stay in line given their proximity is very different from the conversations that either of them are having with the US or Asian regulators. All of those things require navigation by our customers.”
The conversation on global regulation led to a discussion about the US move to a more permissive approach to crypto assets.
Edmunds started out by referencing Bakkt, the ICE crypto market launched in 2018: “When we developed Bakkt, we believed we could do that within the regulatory footprint that existed at the time. The market didn’t want that at that time, so we were a little bit too early.”
Bakkt went on to merge in 2021 with a special purpose vehicle and list on the New York Stock Exchange, owned by ICE.
Speaking to the recent regulatory proposals to allow more crypto trading in the US, Edmunds issued a note of warning: “To me the biggest risk we face is creating an asymmetrical risk between products such as stablecoins backed by Treasuries or traditional financial instruments and traditional finance that uses these as collateral.
“In a moment of stress, these things will become highly correlated and there will be a race for liquidity and what are we going to use in the race - instruments which are now on both sides of the ledger.”
Edmunds specifically cited inconsistencies between funds that hold crypto and the underlying crypto itself when it comes to settlement.
The ICE president said: “All of those things, I believe we will have to get better at. I just hope we’re not forced to get better through some sort of market stress event.”
CFTC moved last week to relax the registration of non-US exchanges including crypto venues.
