Aave founder: UK plans to treat DeFi deposits as "no gain, no loss," which is favorable for crypto lending tax treatment

Foresight News reported that Aave founder and CEO Stani.eth stated, "HM Revenue & Customs (HMRC) has published the results of its consultation on the taxation of DeFi activities (including lending and staking) in the UK. A particularly interesting conclusion is that when users deposit assets into Aave, the deposit itself is not considered a disposal for capital gains tax purposes, thus creating a 'no gain, no loss' (NGNL) approach. This is a major victory for UK DeFi users who wish to borrow stablecoins using cryptocurrency as collateral. I am proud of our Aave Labs team's participation in this consultation, where we advocated for DeFi and ensured that the tax treatment of interactions with lending protocols reflects economic reality: users do not intend to dispose of their assets when borrowing against collateral to meet liquidity needs. We fully support this approach and hope these changes will be reflected in UK tax law as soon as possible."