Close Menu
  • Coins
    • Bitcoin
    • Ethereum
    • Altcoins
    • NFT
  • Blockchain
  • DeFi
  • Metaverse
  • Regulation
  • Other
    • Exchanges
    • ICO
    • GameFi
    • Mining
    • Legal
  • MarketCap
What's Hot

Companies weigh in as UK prepares to reverse crypto ETN ban

07/10/2025

Bankman-Fried says his biggest mistake was handing FTX to new CEO before bankruptcy

07/10/2025

CratD2C SmartChain Merges Blockchain, AI, and IoT to Power a New Decentralized Era

07/10/2025
Facebook X (Twitter) Instagram
  • Back to NBTC homepage
  • Privacy Policy
  • Contact
X (Twitter) Telegram Facebook LinkedIn RSS
NBTC News
  • Coins
    1. Bitcoin
    2. Ethereum
    3. Altcoins
    4. NFT
    5. View All

    Price Breaks All-Time High Record Again – Here’s What We Know

    04/08/2025

    Bitcoin Switzerland? El Salvador to Host First Fully Native Bitcoin Capital Markets

    04/08/2025

    Bitcoin Breaks $119K, but XLM and HBAR Aren’t Impressed by Its Meager Percentage Gain

    04/08/2025

    High-Stakes Consolidation Could Define Q3 Trend

    04/08/2025

    Is $5K Next for ETH After Reclaiming Crucial Resistance?

    07/10/2025

    Ethereum Rockets 9% Weekly but This Massive Barrier Is Next

    07/10/2025

    Ethereum Loses Critical Holders’ Support, Yet Buyers Aren’t Backing Off

    07/10/2025

    Ethereum Dead Cat Bounce in Play? Here’s What Chart Says

    07/10/2025

    The Sui Ecosystem’s Top 3 Altcoin Performers

    29/07/2025

    Floki Launches $69000 Guerrilla Marketing Challenge With FlokiUltras3

    28/07/2025

    Crypto Beast denies role in Altcoin (ALT) crash rug pull, blames snipers

    28/07/2025

    $1.6 Billion XRP Surge: Here’s What’s Unfolding

    28/07/2025

    Web3 sports stickers reshape Telegram fandom with gameplay rewards

    06/10/2025

    FIFA World Cup Blockchain Ticketing Platform Raises Swiss Regulatory Scrutiny: Report

    06/10/2025

    Azuki NFT Price Soars, Trading Volume Explodes Over 100%

    06/10/2025

    TON Foundation and SCOR Introduce Web3 Sports Stickers With Real Gameplay Rewards

    06/10/2025

    Companies weigh in as UK prepares to reverse crypto ETN ban

    07/10/2025

    Bankman-Fried says his biggest mistake was handing FTX to new CEO before bankruptcy

    07/10/2025

    CratD2C SmartChain Merges Blockchain, AI, and IoT to Power a New Decentralized Era

    07/10/2025

    Is $5K Next for ETH After Reclaiming Crucial Resistance?

    07/10/2025
  • Blockchain

    CratD2C SmartChain Merges Blockchain, AI, and IoT to Power a New Decentralized Era

    07/10/2025

    Vaulten launches on Neo N3, bringing on-chain puzzle game to MainNet

    07/10/2025

    Hyperbridge-Powered MicroPay wins Hackathon at TOKEN2049, Enabling AI Agents to Transact Across Blockchain

    07/10/2025

    BNB Chain to Bridge TradFi and Web3 Innovation with Chainlink Collaboration

    07/10/2025

    PEAQ Network Records 500% Q-3 Growth with Dramatic Polkadot Expansion

    07/10/2025
  • DeFi

    Solstice Launches Delta-Neutral YieldVault on Solana with Institutional-Grade Strategies

    06/10/2025

    DeFi Projects Show Massive TVL Growth, $USDAI, $STG, and $ASTER Take Charge

    06/10/2025

    Can Protocols Break the 2021 All-Time High?

    05/10/2025

    Bonk Guy Purchases 7.47 Million $4 via Borrowed $USDT

    05/10/2025

    1inch cofounder Sergej Kunz is coming for centralized exchanges

    05/10/2025
  • Metaverse

    Dogelon Mars Recent Metaverse Updates

    26/09/2025

    ArtGis Finance Partners with MetaXR to Expand its DeFi Offerings in the Metaverse

    17/09/2025

    KaratDAO and SecondLive Partners to Reshape Web3 Identity and Immersive Digital Worlds

    16/09/2025

    Metaverse ‘still has a heartbeat’ as NFT sales jump 27% in August

    12/09/2025

    CreataChain Joins LightCycle to Advance Fashion, Interoperability, and AI in Metaverse

    05/09/2025
  • Regulation

    Could a Government Shutdown Downgrade the US Credit Rating?

    07/10/2025

    Bitcoin Giant Strategy Dodges Multi-Billion Tax Liability Following IRS, Treasury Guidance: TD

    07/10/2025

    How Will the Government Shutdown Affect Cryptocurrencies? Here’s the SEC’s Official Statement and Expert Commentary

    07/10/2025

    Bloomberg Explains $11 Trillion Behemoth Vanguard’s Possible Crypto Pivot

    07/10/2025

    Here’s why gold and Bitcoin are surging as US stocks falter

    07/10/2025
  • Other
    1. Exchanges
    2. ICO
    3. GameFi
    4. Mining
    5. Legal
    6. View All

    Bankman-Fried says his biggest mistake was handing FTX to new CEO before bankruptcy

    07/10/2025

    MIRO and BoostFi Link AI-Driven Trading with Global Crypto Payments to Elevate Web3 Sector

    07/10/2025

    Stripe’s USDC Transfers Exceed $100 Million on Polygon, Base, Ethereum

    07/10/2025

    Hyperliquid Whale Opens $59.1M Bitcoin Short at $123K

    07/10/2025

    ICO for bitcoin yield farming chain Corn screams we’re so back

    22/01/2025

    Why 2025 Will See the Comeback of the ICO

    26/12/2024

    Unmarshal and FishWar Unite to Enhance the Web3 Gaming Experience with AI

    05/10/2025

    We Tested the Best Free AI Image Editors—Here’s What You’ll Love and Hate

    04/10/2025

    This ‘Unhinged’ Weed Farming Game Is Catching Fire on Solana

    02/10/2025

    New Study Shows AI Outpaces Humans in Game Testing

    30/09/2025

    Mongolia turns to digital projects and renewables to diversify from mining dependence

    06/10/2025

    AI/HPC Bitcoin Miners Rally as AMD Soars 30% on OpenAI Deal

    06/10/2025

    Hong Kong-Based Bitcoin Mining Company Cango Releases September BTC Production Report! Here Are the Details

    06/10/2025

    Kazakhstan counts $2.3M in losses to unlicensed mining activities since 2024

    04/10/2025

    Companies weigh in as UK prepares to reverse crypto ETN ban

    07/10/2025

    Ripple’s Top Lawyer Praises CFTC Chair Frontrunner

    07/10/2025

    TOKEN2049 strips U.S.-sanctioned A7A5 stablecoin from sponsor list

    07/10/2025

    FDIC to review rule that may shape banks’ crypto relationships

    07/10/2025

    Companies weigh in as UK prepares to reverse crypto ETN ban

    07/10/2025

    Bankman-Fried says his biggest mistake was handing FTX to new CEO before bankruptcy

    07/10/2025

    CratD2C SmartChain Merges Blockchain, AI, and IoT to Power a New Decentralized Era

    07/10/2025

    Is $5K Next for ETH After Reclaiming Crucial Resistance?

    07/10/2025
  • MarketCap
NBTC News
Home»DeFi»Bitcoin-backed stablecoins just got real — but tax rules still point some to custodians
DeFi

Bitcoin-backed stablecoins just got real — but tax rules still point some to custodians

NBTCBy NBTC13/06/2025No Comments3 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email


This is a segment from the 0xResearch newsletter. To read full editions, subscribe.

The long-awaited relaunch of Liquity v2 this month — after an unfortunate bug scuttled the first deployment — marked a major step forward for decentralized, censorship-resistant borrowing. However, it’s limited to ETH, stETH and rETH as collateral.

To expand collateral options, “friendly forks” are encouraged. Two promising new Bitcoin-backed stablecoins are launching with Liquity’s tech: Alpen Labs’ Bitcoin Dollar (BTD) and Asymmetry’s USDaf.

Built around Liquity’s battle-tested, governance-free model, v2 brings improved capital efficiency and user-set interest rates in addition to new collateral types. Importantly, it extends the original protocol’s strict censorship minimization ethos to new blockchains, including Ethereum and Bitcoin layer-2s, through licensing agreements.

Bitcoin lending has historically been dominated by custodial platforms like BlockFi, Celsius and Ledn, where users surrendered their BTC in exchange for dollar liquidity — often at the cost of transparency, flexibility or sometimes, well, solvency. The latest option, presented in Las Vegas at Bitcoin2025, is from Bitcoin payments company Strike, which offers Bitcoin-backed loans at interest rates between 9-13% — typical for custodial lenders.

Compared to centralized services, the DeFi alternatives offer much better terms.

Asymmetry’s offering, which is live on Ethereum mainnet, accepts tBTC, wBTC and cbBTC at max LTVs above 80%, with borrowing rates currently between 4.2% and 7.1% APR.

Alpen’s BTD, while not yet live on mainnet, aims to do the same using native BTC collateral (eventually via BitVM bridges) in a zero-governance zk rollup, according to CEO Simanta Gautam.

“We’re building a Bitcoin-native, censorship-resistant stablecoin — not another wrapped token or federated bridge,” Gautam told Blockworks.

The BTD will be immutable from day one, and will launch with no governance token or admin keys — much like Liquity itself. That’s unusual among Liquity v2 forks, which typically promise tokens to Liquity’s own BOLD stablecoin liquidity and stability providers.

Even non-Liquity options like Mezo, which launched mainnet this week, offer Bitcoin-backed loans at 1% fixed interest — though users give up custody and flexibility to take advantage. The MUSD stablecoin is only useful via integrated partners in the Mezo Market.

The clear advantages of the decentralized model are capital efficiency, lower interest rates and potentially the elimination of custodial risk. For advanced users looking to allocate new capital to bitcoin, there’s little reason to use a custodial lender.

But there’s one major caveat: tax treatment.

In most jurisdictions, converting native BTC into a non-native version (like LBTC or tBTC) is treated as a taxable disposal. So while borrowing itself is not taxable, the act of moving BTC into a DeFi protocol may trigger a capital gains event. That’s where custodial lenders like Strike and Xapo still hold an edge — by allowing BTC to remain untouched while serving as collateral, they preserve favorable tax treatment for long-term holders.

There’s a third category emerging that may offer a middle ground: Babylon’s native Bitcoin staking, which locks BTC for yield but doesn’t create a derivative or require asset exchange. It’s still early, but that model could offer both yield and tax efficiency — without giving up self-custody. On the other hand, it’s not a stablecoin you can spend elsewhere, and the BTC income may be subject to tax like any other.

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
NBTC

Related Posts

Solstice Launches Delta-Neutral YieldVault on Solana with Institutional-Grade Strategies

06/10/2025

DeFi Projects Show Massive TVL Growth, $USDAI, $STG, and $ASTER Take Charge

06/10/2025

Can Protocols Break the 2021 All-Time High?

05/10/2025

Bonk Guy Purchases 7.47 Million $4 via Borrowed $USDT

05/10/2025
Add A Comment

Comments are closed.

Top Posts
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Your source for the serious news. This website is crafted specifically to for crazy and hot cryptonews. Visit our main page for more tons of news.

We're social. Connect with us:

Facebook X (Twitter) LinkedIn RSS
Top Insights

Companies weigh in as UK prepares to reverse crypto ETN ban

07/10/2025

Bankman-Fried says his biggest mistake was handing FTX to new CEO before bankruptcy

07/10/2025

CratD2C SmartChain Merges Blockchain, AI, and IoT to Power a New Decentralized Era

07/10/2025
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Type above and press Enter to search. Press Esc to cancel.