The UK government is proposing a new tax framework for decentralized finance (DeFi) transactions, aiming to simplify compliance and encourage wider participation. The proposal seeks to align taxation practices with the operational methods of DeFi platforms, reducing the immediate burden on users when it comes to capital gains tax. This initiative focuses on deferring taxes until assets are actually sold, rather than taxing deposits, which is currently a source of criticism. 🤝 Industry support for this change is evident as players like Aave and Binance have expressed their endorsement during consultations. The government’s goal is to establish the UK as a leader in crypto-friendly regulation, similar to past tax reforms that boosted industry growth. This proposal has the potential to significantly impact the DeFi ecosystem by enhancing liquidity and driving long-term growth in Ethereum.