UK Considers New Tax Framework for DeFi Assets

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.

A new framework aims to align tax rules more closely with DeFi operations to reduce administrative burdens and avoid unreasonable taxation on routine protocol interactions.

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.

According 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.