UK and International Tax news

HMRC Consults on Taxation of Stablecoins

Monday 13th April 2026

HMRC is seeking views on the taxation of stablecoins, a type of cryptoasset that seeks to maintain a stable value by reference to another asset, such as a fiat currency, and any administrative burdens this might cause as the stablecoin market develops.

Currently stablecoins are generally treated like other cryptoassets for tax purposes. Where they potentially play a more significant role in both wholesale and retail payments in the future, the government is considering whether this treatment is remains appropriate or whether it should be considering making changes.

Given stablecoins are treated in the same way as other cryptoassets, there are no specific tax rules for their treatment, nor is the term ‘stablecoin’ specifically defined in existing tax legislation. The treatment that applies will depend on the circumstances in which they are used, and can also depend on the particular features of the stablecoin in question, but they would not generally be considered as money.

Whilst they are designed to maintain a stable value, economic gains and losses can still arise on stablecoins, for example as a result of foreign exchange movements on non-sterling denominated stablecoins. However, gains and losses can also arise in situations where a stablecoin’s value deviates, whether temporarily or permanently, from its par value.

For individuals, CGT treatment applies on the disposal of an asset that is not exempt, and where no other tax rules take priority.  Stablecoins will typically be chargeable assets in the same way as other types of cryptoassets, regardless of whether they reference sterling, a foreign currency, other assets, or are stabilised through a pricing algorithm. Depending on the redemption rights they provide and who holds the token, some stablecoins can legally amount to a debt between issuer and holder in respect of the referenced fiat currency.

CGT rules provide an exemption for simple debts but this is unlikely to apply to stablecoins in the vast majority of cases as, even where there is a debt, the exemption only applies where the debt is disposed of by the original creditor, which for a stablecoin is unlikely to be an individual.

This means that under the current rules, the use of stablecoins as a means of payment will typically constitute a disposal for CGT purposes. As a result, the acquisition and disposal cost must be recorded in order to calculate capital gains or losses.

For sterling-denominated stablecoins, any gain or loss is likely to be negligible because a sterling-denominated stablecoin should not fluctuate relative to sterling. However, such transactions must still be tracked, as once aggregate proceeds from all disposals exceed £50,000, they may need to be reported to HMRC irrespective of whether gains or losses arise.

Foreign currency denominated stablecoins will fluctuate in value relative to sterling due to exchange movements, and therefore disposals will give rise to gains and losses.

To date, stablecoins have primarily been used in the cryptoasset ecosystem to facilitate the purchase and sale of other cryptoassets, and as part of decentralised finance arrangements. For individuals who are actively engaged in a high volume of cryptoassets transactions, it is common to rely on tax calculator software to assist with tax computations. In such cases, the tax calculator software should also be able to calculate the gains and losses arising on the stablecoins.

However, a broader adoption of stablecoins could involve retail payments for everyday purchases, as opposed to using them in the cryptoasset ecosystem. Where there is broader adoption, individuals are unlikely to be familiar with using tax calculator software, and it is likely to be impractical. The requirement to track these transactions for tax compliance would be an administrative burden that does not exist for other, more traditional means of retail payment (such as cash or card payments) and could therefore act as a disincentive to their use.

Income tax could apply in situations involving stablecoins, for example:

  • where they are received as remuneration as part of an individual’s employment, and charged to income tax in the usual way
  • where returns are generated from staking or lending, but are not profits of a trade, but miscellaneous income
  • where payments are received by individuals for the provision of goods or services, and subject to income tax as trading income
  • where an individual carries on a trade of buying and selling cryptoassets including stablecoins

Income received in the form of stablecoins would be taxable in the same or similar way as if they were paid in cash. Therefore, their current treatment under income tax provisions may not cause disproportionate administrative burdens for individuals.

Corporate tax treatment of stablecoins will depend on the particular features of the stablecoins in question and how they are used by the company. Tax regimes applying to loan relationships, intangible fixed assets, trading, chargeable gains, could potentially be relevant.

For example, a company has a loan relationship when it has a money debt that arises from a transaction for the lending of money, or a money debt where an instrument has been issued representing security for it or creditor rights in respect of it. Where a stablecoin provides rights of redemption for the holder, a money debt will likely arise and, as a result, these may fall within the loan relationship rules, with profits or losses taxed or relieved as income based on the accounts.

For foreign currency-denominated stablecoins, special exchange gains and losses rules could apply, such as the Disregard Regulations.

Stablecoins will not typically meet the requirements to be taxed under the Intangible Fixed Assets regime and stablecoins are unlikely to be acquired or created for use on a continuing basis in the company’s business, i.e. as a ‘fixed asset’.

Where a stablecoin is used for the purposes of a trade carried on by the company, for example as part of a trade in buying and selling cryptoassets, any profits or losses arising on it will usually be taxed as part of the company’s trading profits. This could either be by virtue of being a trading loan relationship or directly as part of the trading profits calculation.  If no other rules apply, then gains and losses arising from stablecoin transactions will be calculated under the chargeable gains rules for companies. This will require separate calculations to determine the taxable gains and losses on disposals of stablecoins.

Additional complexity can arise where a company lends a stablecoin. If the stablecoin itself is a loan relationship, the lending of that stablecoin will create a money debt. However, the lending is unlikely to be an actual loan relationship, because stablecoins are not generally considered to be money and therefore there is no transaction for the lending of money. Instead, amounts such as exchange gains and losses and impairment losses would be brought into account under the non-lending relationship rules in Part 6 CTA 2009. Returns on lending, however, would generally not be treated as interest, because they are not returns on the lending of money, and would instead be expected to be miscellaneous income under Part 10 CTA 2009.

HMRC’s Call for Evidence seeks views on how stablecoins are treated for both individuals and companies. The government would like to hear from investors, professionals and firms that use stablecoins, including technology and financial service firms, trade associations and representative bodies, academic institutions and think tanks, and legal, accountancy and tax advisory firms.

The consultation runs from 26 March to 7 May 2026.

If you would like more information on the above, please contact Keith Rushen on 0207 486 2378.

 

 

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