HMRC launch Call for Evidence on stablecoin taxation

• Individuals: Each use of a stablecoin as a means of payment constitutes a disposal for capital gains tax (CGT) purposes, creating a tracking and reporting obligation that does not apply to fiat currency payments. For sterling-denominated stablecoins, gains are likely to be negligible; for non-sterling stablecoins, foreign exchange movements will generate real gains and losses;
• Companies: The applicable tax regime — loan relationships, intangible fixed assets, trading, or chargeable gains — depends on the specific features of the stablecoin and how it is used. Depending on the structure of a stablecoin it may: give rise to a money debt, if so the loan relationship rules may apply; form part of trading profits; otherwise, chargeable gains rules apply by default; and
• Interest-like returns: Returns generated from lending stablecoins are not treated as interest, because stablecoins are not considered to be money. Although qualifying stablecoins including those under the EU’s Electronic Money Token regime, cannot pay interest directly, they may still be used in lending transactions which give rise to interest-like payments.

Proposed reform options

HMRC are consulting on targeted reforms. The key proposals are:

• CGT exemption for individuals: Treating certain stablecoins as exempt assets, removing the requirement to treat disposals as chargeable events, or alternatively, introducing a de minimis reporting threshold for low-value transactions;
• Corporation Tax: Bringing more stablecoin transactions within the loan relationship rules, including transactions where a company lends stablecoins - currently not treated as a transaction for the lending of money;
• Interest-like returns: Aligning the tax treatment of stablecoin lending returns with those on equivalent fiat currency debt, for both individuals and companies;
• Scope: Any reforms are likely to be limited to currency-denominated, asset-backed stablecoins, using the regulatory definition of ’qualifying stablecoin’ as a starting point. Whether non-sterling denominated stablecoins are included remains an open question; and
• Interaction with ‘no gain, no loss’ proposals: HMRC have also raised the interaction with the proposed ’no gain, no loss’ treatment for cryptoasset loans and liquidity pools (consulted on separately in November 2025) and seek views on how stablecoin reforms should sit alongside that framework.

For taxpayers bringing digital asset products to market in the UK, this consultation is directly relevant. The growth of on-chain settlement - whether in tokenisation or broader payments infrastructure - depends in part on stablecoins being able to function as a genuine fiat equivalent. The current treatment, which imposes CGT tracking obligations and denies ’money’ status for interest and withholding tax purposes, creates friction that does not apply to cash settlement. This Call for Evidence is an opportunity to put those concerns directly to HMRC and make the case for reform that aligns the tax treatment of stablecoins with their economic function.

For further information please contact:

• Susanne Dixon
• David Wren