This Week in Bitcoin: Regulation Heats Up, CFTC Pilots Advance

TL;DR: Bitcoin sees regulatory momentum with U.S. Senate drafts expanding CFTC powers, SEC custody clarity, and new pilots, alongside UK rules and institutional pilots using BTC as collateral.

Key takeaways

U.S. Senate releases bipartisan CFTC digital commodity bill, mirroring traditional finance rules[1].
CFTC launches pilot accepting Bitcoin as derivatives collateral; SEC eyes 2026 exemptions[1][2].
IRS safe harbor enables staking in trusts; UK unveils growth-focused crypto regulations[1][5].
Institutional adoption grows via pilots, though price targets dip amid regulatory flux[2].

Major U.S. Regulatory Developments

The U.S. Senate Committee on Agriculture, Nutrition and Forestry unveiled a bipartisan draft in November 2025 granting the CFTC exclusive jurisdiction over spot digital commodity markets, including Bitcoin[1]. This Boozman-Booker proposal requires brokers, dealers, custodians, and trading facilities to register with the CFTC, enforcing segregation of customer assets, cybersecurity standards, and conflict-of-interest safeguards akin to traditional markets[1]. Unresolved issues like definitions for "blockchain" and "decentralized finance" persist, with stakeholder feedback ongoing and no markup date set[1].

The SEC advanced custody clarity on September 30, 2025, via a No-Action Letter permitting advisors to hold crypto with State Trust Companies under the Investment Company Act[1]. Chairman Atkins signaled an "innovation exception" rollout in January 2026, delayed by shutdown, while providing Congress guidance on bills like the CLARITY Act[1]. The World Federation of Exchanges warned against exemptions diluting securities protections[1].

Cross-agency efforts intensified with a September 29, 2025, SEC-CFTC roundtable on harmonization through information-sharing and joint exams[1]. The IRS joined on November 10, 2025, issuing Rev. Proc. 2025-31 for trusts to stake crypto while retaining investment trust status[1].

ETF Flows and Institutional Adoption Updates

Search results lack specific week-ending December 18, 2025, Bitcoin ETF flow data, but broader institutional moves signal adoption. The CFTC launched a Digital Assets Pilot Program allowing Bitcoin, Ethereum, and USDC as collateral for derivatives on regulated markets, easing institutional entry[2]. This pilot underscores Bitcoin's maturing role in traditional finance.

Standard Chartered slashed its year-end 2025 Bitcoin price target to $100,000 from $200,000, citing regulatory and market pressures, while maintaining a $500,000 long-term view post-2030[2]. The SEC's Crypto Task Force, led by Commissioner Hester Peirce, continues focusing on custody, jurisdiction, and token relief since February 2025[3][9].

Global Regulatory Momentum

The UK government announced on December 15, 2025, new crypto rules to foster growth and protect customers, with Chancellor backing proportionate regulations for crypto firms[5]. The FCA's CP25/40 consultation details these activities regulations[6]. U.S. states also clarified digital asset property rules for perfection and priority[8].

What to do next

Retail investors should monitor CFTC and SEC updates for trading impacts while prioritizing self-custody to avoid exchange risks amid regulatory shifts. Use a hardware wallet like Ledger for secure Bitcoin storage—generate a seed phrase offline, never share it, and verify addresses on-device (https://shop.ledger.com/?r=92d74dc2847a). Track ETF flows via on-chain tools like Glassnode and diversify holdings across self-custodied BTC and regulated products.

This Week in Bitcoin: Regulation Heats Up, CFTC Pilots Advance

Major U.S. Regulatory Developments

ETF Flows and Institutional Adoption Updates

Global Regulatory Momentum

What to do next

Sources

Secure Your Bitcoin Today