British tax officials have issued new rules that could make it easier for people to use cryptocurrency lending platforms without facing immediate tax bills, according to Aave founder Stani Kulechov.
The tax authority HMRC has stated that depositing digital coins or stablecoins like USDC and USDT onto decentralized finance platforms will not be considered a taxable event at the moment of deposit. This means individuals who lend out their cryptocurrency, stake it, or borrow money against it will not be subject to capital gains charges simply for placing their digital holdings onto these platforms.
Stani Kulechov, the founder of the DeFi platform Aave, commented that this decision follows years of discussions with tax officials and provides much-needed clarity for users.
Tax bills will now only be triggered when an individual disposes of their assets by selling them, swapping them for another asset, or cashing out. Moving tokens into and out of DeFi protocols is being treated as a transaction with "no gain, no loss," offering individuals clearer guidelines on their tax obligations.
Implications for Crypto Users
“For users, this is significant,” Kulechov told Yahoo Finance Future Focus. “They now have more clarity over HMRC’s approach, and they can use DeFi lending protocols to borrow funds against their collateral without creating a taxable event or a disposal.”
The tax authority has clarified that locking up cryptocurrency as collateral for a loan, or depositing a single token into a lending or staking arrangement, will not incur a tax charge upon deposit under this "no gain, no loss" framework. The taxable event is generally deferred until an actual disposal occurs, such as selling or exchanging the asset.
Kulechov suggested that this increased clarity might encourage more professional investors to explore crypto innovations. These larger entities have often refrained from engaging with DeFi due to uncertainty surrounding the regulatory and tax landscape.
“It simplifies the tax approach, which reduces the burden and allows for wider adoption by institutions, but also simplifies things for regular retail users,” he stated.
Kulechov highlighted that the broader adoption of decentralized finance is heavily dependent on simplifying its accessibility. Historically, DeFi has primarily attracted individuals familiar with blockchain wallets and exchanges.
Aave is actively working to address this by developing a user-friendly experience optimized for mobile devices. This initiative aims to allow users to transfer funds from traditional bank accounts to Aave with minimal complexity, with the platform managing the underlying technical processes.
“Providing a seamless mobile experience is a really big opportunity for retail users,” he noted. “It makes yield generation and lending accessible to a much wider audience.”
Shifts in Traditional Savings
The new guidance from HMRC comes at a time when traditional savings options in the UK are becoming less attractive. Recent government budget decisions have led to a reduction in cash ISA allowances, potentially prompting many savers to seek higher returns elsewhere. Effective April 2027, the annual cash ISA limit for individuals under 65 will decrease from £20,000 to £12,000, reducing the capacity for tax-free cash savings.
In contrast, DeFi platforms like Aave enable users to earn consistent returns on their digital assets, independent of traditional market fluctuations, while maintaining the flexibility to deposit or withdraw funds at their convenience. Kulechov indicated that this combination of features is increasingly appealing to savers searching for alternative financial opportunities.
“What DeFi really helps with is accessing yield and financial opportunities,” Kulechov explained. “Aave has been battle-tested over the past five years and shows how decentralized finance as financial infrastructure can work effectively, mitigating single points of failure through smart contracts.”