Aave CEO Reveals How UK’s New Tax Rules Will Spark Crypto Growth

Highlights:

• The UK’s new tax rules allow crypto lending without immediate tax liabilities.
• DeFi platforms like Aave offer attractive returns amidst shrinking traditional savings.
• The new tax approach simplifies crypto investing, boosting retail and institutional interest.

The new tax regulations in the UK have introduced major transformations in the cryptocurrency market. The purpose of these changes is to define the position of a decentralized finance (DeFi) transaction. Stani Kulechov, the founder of DeFi platform Aave, stated that this will lead to increased adoption and possibly spark a crypto boom.

Tax Clarity Boosts Crypto Lending and Borrowing

HMRC (Her Majesty’s Revenue and Customs) clarified that transferring digital assets or stablecoins such as USDC or USDT to DeFi will not trigger tax events. This implies that users are able to lend, stake, or borrow against their crypto holdings without facing capital gains tax when they deposit their assets on the platforms. Users will only pay taxes at the point when they sell or trade their crypto, rather than at the point of moving in or out of the DeFi platforms.

This “no gain, no loss” policy offers clear guidance to the crypto users. It eliminates the ambiguity that has been present in DeFi transactions. Moreover, it makes it simple for people to engage with DeFi without fear of getting taxed.

Aave founder Stani Kulechov said the UK HMRC’s latest DeFi guidance could mark a major turning point for crypto lending: depositing assets like USDC or USDT into DeFi is not treated as a disposal and doesn’t trigger capital gains tax; tax applies only on actual sales or swaps.…

— Wu Blockchain (@WuBlockchain) December 6, 2025

Aave’s Role in Simplifying DeFi for Users

According to Kulechov, the UK’s new tax rules will bring DeFi closer to retail and institutional investors. An example of this is Aave, which aims to make DeFi more accessible to regular people. The platform is focused on providing a mobile-first experience. This allows users to easily move funds from traditional banks without having to worry about the technical aspects of the whole DeFi process.

The new tax rules provide a clearer avenue through which both retail and institutional investors can invest in crypto lending and borrowing. The streamlined taxation procedure will assist in eliminating obstacles that once led institutions to avoid DeFi use. It also simplifies the DeFi usage by regular users who might not understand the blockchain technology.

DeFi Offers Alternatives to Traditional Savings

The UK’s new tax rules correspond with changing savings prospects in the region. The autumn budget issued by the government announced reductions to the cash ISA allowances. Starting in April 2027, the yearly cash ISA cap on individuals under 65 will be reduced to £12,000 by lowering the current cap of £20,000. This may compel the savers to seek other options that yield higher returns.

Traditional savings products have attractive alternatives on platforms such as Aave. Users have the opportunity to earn interest on their digital assets. Furthermore, they will retain the freedom to deposit or withdraw funds at any time. Kulechov believes that DeFi is capable of providing stable, uncorrelated returns, unlike old savings products, which are beginning to lose their appeal.

The recent update in the Property (Digital Assets etc) Act is another important change that enhances the crypto market in the UK. The new law officially acknowledges cryptocurrencies and electronic assets as personal property under the UK national law.

Update – this Bill is now on the way to the King's desk for Royal Consent and will shortly become law. See thread for some extra details👇

A hugely significant step for English law and for UK citizens who use Bitcoin.@bitcoinpolicyuk have been supporting this since the Law… https://t.co/ZbBdK59yZi

— Freddie New (@freddienew) December 2, 2025

Despite these developments, some figures in the crypto sector have raised an alarm regarding the regulatory climate in the UK. Arjun Sethi, co-CEO of Kraken, criticized the UK’s crypto rules, arguing that they are hindering retail growth. Sethi claimed the rules impose unnecessary obstacles on users, which are slowing down transactions and limiting access to crypto products.