Cryptocurrencies are unregulated in the UK. Cryptocurrency profits may be subject to Capital Gains Tax. The value of investments is variable and can go down as well as up.
Dai (DAI) is a decentralised US dollar stablecoin operating on the Ethereum network.
Unlike its centralised cousins (i.e. USDT, USDC and PAX), DAI doesn’t promise that its supply is backed 1:1 with US dollars. Instead, it holds a diverse basket of ERC-20 tokens on behalf of users, who are compensated with an equivalent amount of DAI.
When the value of the tokens goes up, more DAI is introduced into the system but people can still buy back their collateral at the original price. When the value of the tokens goes down, parts of the asset basket are liquidated to maintain the peg, meaning your collateralized position will also be reduced and you’ll receive back less than you put in.
DAI has been developing its Collateralized Debt Position (CDP) system since 2014 and it remains the biggest player in the decentralised stablecoin space. DAI’s governance token – allowing holders to vote on changes to the DAI protocol – is known as Maker DAO and is also available on CoinJar.
CoinJar’s digital currency exchange services are operated by CoinJar UK Limited (company number 8905988), registered by the Financial Conduct Authority as a Cryptoasset Exchange Provider and Custodian Wallet Provider in the United Kingdom under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended (Firm Reference No. 928767).
Cryptoassets carry high risk. Due to the potential volatility of the cryptoasset markets, the value of your investments may fall significantly and lead to total loss. Cryptoassets are complex and are unregulated in the UK, and you are unable to access the Financial Service Compensation Scheme or the Financial Ombudsman Service. We use third party banking, safekeeping and payment providers, and the failure of any of these providers could also lead to a loss of your assets. We recommend you obtain financial advice before making a decision to use your credit card to purchase cryptoassets or to invest in cryptoassets. Capital Gains Tax may be payable on profits.
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