UK Government Announces Major Easing of DeFi Tax Regulations! Aave Founder Stani Kulechov Publicly Praises

CoinCircle (120BTC.COM) reports: As the decentralized finance (DeFi) ecosystem continues to mature, regulatory agencies around the world are beginning to adjust overly rigid tax regulations. On July 14, 2026, Beijing time, foreign media Decrypt reported that the UK’s HM Revenue and Customs (HMRC) released the latest cryptocurrency tax revision policy, bringing significant benefits that DeFi participants have long awaited.

Ending "Paper Gains," 700,000 People Benefit from New Regulations
According to the policy document released by HMRC on Monday, the UK government will amend the Taxation of Chargeable Gains Act 1992. Starting from April 6, 2027, users who deposit crypto assets into DeFi lending protocols or provide liquidity to automated market makers (AMMs) will officially be subject to the "No Gain, No Loss" principle, no longer being recognized as "taxable disposals" that trigger Capital Gains Tax (CGT).

This means that as long as the same type of asset is used for entering and exiting the protocol, no tax event will occur; the tax burden will be reasonably deferred until the investor actually sells the asset, realizes "cash," or when there is a discrepancy between the number of tokens withdrawn from the liquidity pool and those deposited, at which point gains or losses must be calculated according to the law. Additionally, assets used as collateral for loans will also not be counted towards Capital Gains Tax. It is estimated that this new system will benefit approximately 700,000 individuals and trustees using cryptocurrency lending and liquidity pools in the UK.

Reducing Administrative Burdens, Aave Founder Praises the Move
Looking back at 2022, HMRC's guidelines strictly regarded "depositing into DeFi protocols" as asset disposals, which led to users having to file complicated tax returns and pay taxes for virtual "paper gains" even when they had not sold their cryptocurrencies for fiat, causing strong backlash from the industry.

In response to the UK government's decision to amend this, Aave founder Stani Kulechov publicly expressed his appreciation. He stated that this is a significant step in the "right direction"; without this reform, taxpayers would face an unbearable burden of paperwork. Kulechov also pointed out that this is the sweet fruit of multiple consultations and lobbying efforts by the industry since 2022, proving that the tax rules for DeFi are gradually maturing and becoming more pragmatic.

Stablecoin Taxation Expected to Ease, Providing a One-Year Buffer for the Market
In addition to easing Capital Gains Tax on lending and liquidity pools, Kulechov also revealed that HMRC is considering other plans, with the hope of adjusting the tax treatment of stablecoins to be closer to traditional "currency" in order to further reduce friction costs in payments and transactions.

However, this policy still requires certification from the UK Office for Budget Responsibility (OBR) regarding the final cost estimates. With more than a year left before its official implementation in 2027, this will provide DeFi users and major protocols ample time to adjust their tax reporting strategies. The implementation of this crypto-friendly policy in the UK is expected to significantly reduce tax complexity and encourage more traditional funds to participate painlessly in the DeFi ecosystem.

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