Press Room

7 Jun 2023

Laura Knight comments on the unexpected tax hitting UK crypto investors when they use USD stablecoins

International and Crypto Tax Director Laura Knight discusses why many UK investors are unaware that trading between cryptoassets could create a taxable event, with poundtoken.

Laura’s comments were published in poundtoken, 31 May 2023.

“The majority of daily trades on crypto exchanges are not fiat-to-crypto but rather buying and selling stablecoins for other cryptoassets. Through working with crypto investors, we’ve found that many are surprised to learn that trading from one stablecoin or cryptocurrency to another creates a taxable event, even if no money is withdrawn.

“Despite this, the use of US dollar-pegged stablecoins remains dominant amongst UK crypto investors. This leads to more complicated tax returns as foreign exchange conversions occur at a higher rate. If UK Investors use GBP-denominated stablecoins, they can help mitigate the exchange fluctuation risk associated with USD pegged stablecoins.”

Laura Knight

Laura is International & Crypto Tax Director and has over 20 years’ tax adviser experience with nearly 10 years in a top tier UK/US firm gaining extensive experience over a broad range of UK private client advisory and compliance requirements with an international angle.

Email: Laura Knight