I’ve always been of the understanding that it is possible to borrow fiat currency against collateralised bitcoin so as not to incur a CGT event, however, last night I was listening to a twitter spaces call about Sovryn’s new defi protocol that will allow for 0% interest loans at 110% collateralised bitcoin positions.
A question from the community came up stating that the FCA or HMRC (not sure which) have/will issue guidance stating that getting a bitcoin backed loan is going to be considered a CGT even, however, I’ve been unable to find any information in relation to this claim and wondered if anyone else has heard of this?
What’s interesting is the caller mentioned that Celsius.Network stopped providing loans to UK residents as they were forced into classifying the loan as a sell/buy event, however, as Sovryn new product is a decentralised protocol, technically speaking, the collateral never leaves your ownership and therefore it’s my belief a user of the product wouldn’t fall under these new ridiculous rules if they turn out to be true.
Any information welcome.
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