Cryptoassets and decentralised finance

On 5 July 2022 HMRC released Individuals holding cryptoassets: uptake and understanding. According to this report 10% of UK adults hold or have held a cryptoasset. This may be surprising to those who dismiss cryptocurrencies and other digital assets as a fad but with an estimated $30bn invested into the global crypto industry in 2021 (according to KPMG’s Pulse of Fintech H2’21 report from January 2022) crypto in some form is here to stay. This is further supported by Google Microsoft PayPal and Goldman Sachs (to name a few) backing projects in the crypto space. As Andrew Hubbard said in these pages in March cryptocurrency has ‘moved well into the mainstream’ (‘Overcoming adversity’ 31 March 2022 page 14).

One area of rapid innovation has been decentralised finance or DeFi for short. The term describes peer-to-peer finance such as: collateralised and...