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HMRC update cryptocurrency guidance to include decentralised finance

Posted: February 10, 2022

HMRC have recently updated their guidance on Decentralised Finance (DeFi) and the tax implications surrounding this area of cryptocurrency.

What is DeFi?

DeFi is an umbrella term used to provide products akin to traditional financial services through Distributed Ledger Technology. DeFi platforms can provide services such as Decentralised exchanges (DEXs), savings, lending and derivatives.

DeFi lending platforms facilitate lending between unconnected lenders and borrowers. A lender could then be provided with a return on their loan, allowing cryptoassets to provide a source of income in addition to any increase in the capital value of the cryptoassets.

Read more here: https://www.burgesshodgson.co.uk/wp-content/uploads/defi.pdf