De-Fi Adoption in UK Accelerates

The government of the United Kingdom is asking the public for input on the taxation of crypto asset loans and staking in the context of decentralized finance (DeFi).

DeFi is an umbrella term that refers to financial applications that are built on top of blockchain technology. This could include anything from lending to borrowing and staking platforms.

In particular, the government is interested in gathering information on the taxation of crypto asset loans and staking. Her Majesty’s Revenue and Customs (HMRC) call for evidence paper, published on Tuesday, described its intention to study whether administrative hassles and costs may be reduced for taxpayers who participate in the emerging industry, as well as whether the tax treatment might be more aligned with the transactions’ fundamental economics.

HMRC is seeking input from investors, professionals and organizations involved in DeFi-related activities such as technology and financial services companies, trade associations and representative bodies, educational institutions and think tanks, and legal, accounting and tax advisory businesses. Interested parties have until Aug. 31, 2022 to submit their response via an email provided by the agency.