- UK plans deferral of tax liabilities for DeFi deposits.
- Proposed by HM Revenue and Customs.
- Impact on ETH and ERC-20 tokens in DeFi protocols.
The UK government, through HM Revenue and Customs, is proposing a new tax framework for DeFi users, affecting cryptocurrency lending and liquidity pools, as reported on November 28th.
This proposal could reduce upfront tax burdens for DeFi users in the UK, aligning tax rules with DeFi operations and simplifying compliance.
UK’s ‘No Profit, No Loss’ Principle for Crypto Lending
HM Revenue and Customs has released proposals supporting a “no profit, no loss” principle for crypto lending and liquidity pools. The new tax framework discourages tax on routine DeFi interactions, impacting tokens like Ethereum. HMRC cryptoassets manual detailing guidelines and regulations aims to reduce administrative burdens by aligning with DeFi operations.
These changes mean users will pay taxes only when they trade or sell assets for a profit. The proposal has been a relief for DeFi users as they avoid immediate tax liabilities. HM Revenue and Customs continues to consult industry experts to finalize the framework. Market participants have responded positively, viewing it as a step forward. Industry experts appreciate the effort to align tax laws with DeFi activities.
Ethereum’s Market Position and Global Tax Implications
Did you know? This proposal could set a global precedent in crypto tax policy, offering a balanced approach amid growing industry complexity.
As of November 27, 2025, Ethereum, a key token in DeFi, trades at $3,015.51 with a market cap of 363.96 billion USD, holding an 11.69% market dominance as per CoinMarketCap. Recent months have seen Ethereum’s price fluctuating, showing a 6.30% rise in seven days despite a 31.00% decline over 90 days. Current developments in the UK may further influence its market trajectory.
Ethereum(ETH), daily chart, screenshot on CoinMarketCap at 23:51 UTC on November 27, 2025. Source: CoinMarketCapAccording to Coincu research, this proposal could set a global precedent in crypto tax policy, offering a balanced approach amid growing industry complexity. DeFi’s evolving nature requires forward-thinking in regulation, possibly leading to more aligned international tax standards. Bold moves like these can attract additional investments and innovation in the sector.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
Source: https://coincu.com/news/uk-defi-tax-framework-proposal/
