Aave Founder: New UK Tax Rules Simplify Taxation and Encourage Institutional Adoption of Cryptocurrency

According to Yahoo Finance, Aave founder Stani Kulechov stated that the recent tax guidance from the UK's HM Revenue & Customs (HMRC) marks a turning point for crypto lending in the UK. The guidance indicates that depositing digital assets or stablecoins like USDC or USDT into DeFi platforms will not be considered a taxable event at the time of deposit. In other words, users can deposit their crypto assets into DeFi platforms for lending, staking, or borrowing without triggering capital gains tax. Capital gains tax will only be due when users actually dispose of their assets (such as selling, converting, or cashing out) rather than just transferring tokens in or out of DeFi protocols. These regular DeFi transactions now fall under the category of 'no gain, no loss' under the new approach, providing investors with clearer and more practical tax guidance. Kulechov added that the simplified tax approach reduces burdens, enabling institutions to adopt crypto more widely, while also streamlining operations for ordinary retail users.

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