Crypto lending
Also known as: lending, crypto loans
Lending out crypto to earn interest, where the interest is generally revenue income and depositing or withdrawing may have tax effects.
Definition
Crypto lending means depositing assets with a platform or protocol to earn interest, paid in crypto. The interest is generally revenue income at its rand value when received. Depending on how the lending is structured (for example if you receive a different token in exchange for your deposit), the deposit or withdrawal itself may be a disposal. Borrowing against crypto is generally not a disposal, but liquidation of collateral is.
Example
You lend USDC and earn interest in USDC; the interest is income on receipt. If your collateral is liquidated on a loan, that liquidation is a disposal.
Jurisdiction notes
- South Africa: Crypto interest is generally revenue income on receipt; collateral liquidation is a disposal, while borrowing itself usually is not.