The demystification of decentralised finance: finding our way through

Decentralised finance (or DeFi) is growing rapidly. In the UK, we are seeing various government proposals towards creating the early stages of a framework, as well as HMRC guidance on the taxation aspects of DeFi.

HMRC introduced updated guidance on crypto assets on 2 February 2022, looking at the world of decentralised finance (DeFi) (see CRYPTO61214 at bit.ly/36LQPj8).

In my last Tax Adviser article on crypto assets, ‘The crypto revolution’ (December 2021), I referred to comments made by Sir Jon Cunliffe, Deputy Governor for Financial Stability at the Bank of England, who stated that between 2020 and 2021 DeFi had grown ten times in size to $100 billion and was continuing to grow quickly.