Layla Zulfa
The French National Assembly’s Finance Committee has signaled a significant shift in the nation’s fiscal approach to digital assets, voting in favor of amendments that would fundamentally alter how cryptocurrency gains are realized and taxed. In a move that has sent ripples through the European blockchain ecosystem, the committee approved measures to tax cryptocurrency holders who exchange their digital assets for stablecoins—tokens pegged to the value of sovereign currencies like the US dollar or the euro. Additionally, the committee endorsed an "exit tax" aimed at wealthy individuals who relocate their tax residency abroad while holding substantial cryptocurrency portfolios.
While these votes represent a hardening of the legislative stance toward the crypto sector, their immediate legal impact remains in flux. On Friday, the Finance Committee rejected the entire revenue section of the 2027 budget proposal by a decisive margin of 31 votes to 3. This rejection effectively resets the legislative clock, meaning the full National Assembly will begin its floor debate on the government’s original budget text, devoid of these specific committee amendments, starting October 13. To become law, supporters of the crypto-tax measures must re-table their proposals during the plenary sessions and navigate the remainder of the French legislative process.
Closing the Stablecoin Loophole
The primary amendment targeting stablecoins was spearheaded by Nicolas Sansu, a deputy representing the left-wing GDR (Gauche démocrate et républicaine) group, along with 16 co-signatories. The authors of the proposal characterized the current tax framework as containing a "hole in the legislation" that allows investors to defer tax liabilities indefinitely.
Under current French tax law, the exchange of one cryptocurrency for another—including Bitcoin for a stablecoin—is considered a neutral event that does not trigger a taxable gain. Capital gains taxes are only levied when digital assets are sold for "fiat" currency (legal tender like the euro) or used to purchase goods and services. Sansu’s amendment seeks to reclassify swaps into stablecoins as a taxable sale.
The proposed text specifically targets "electronic money tokens" as defined under the European Union’s Markets in Crypto-Assets (MiCA) regulation. This category encompasses the vast majority of stablecoins tied to a single official currency. If enacted, the law would take effect on January 1, 2027. From that date, any investor swapping a volatile asset for a stablecoin would be required to calculate the gain relative to their original purchase price and pay the applicable tax.
The amendment does not propose a bespoke tax rate but rather integrates these transactions into France’s existing "flat tax" (Prélèvement Forfaitaire Unique or PFU). As of January 1, 2024, the flat tax on capital gains stands at 31.4%. This figure is the result of a 12.8% income tax component combined with social security charges, which recently rose from 17.2% to 18.6% following the 2026 social security financing law.
Proponents of the measure argue that stablecoins serve as a functional equivalent to cash within the crypto ecosystem. They contend that because stablecoins can be used to pay for services at crypto-service providers or to purchase other tokens without leaving the digital environment, allowing tax deferral provides an unjustified advantage to crypto investors over traditional equity investors.
The Cryptocurrency Exit Tax
In a parallel effort to prevent capital flight, the Finance Committee also approved a second amendment from Sansu regarding an "exit tax" for digital assets. This levy is designed to capture unrealized gains on cryptocurrency holdings when a taxpayer moves their residence out of France.
The proposed exit tax would apply to any tax household whose combined cryptocurrency holdings exceed €800,000. This includes assets held in self-custody wallets as well as those managed by third-party custodians or exchanges. To be subject to the tax, the individual must have been a French tax resident for at least six of the ten years preceding their departure.
The mechanics of the crypto exit tax are modeled after existing regulations for traditional stocks and shares. The €800,000 threshold aligns with the current trigger for equity-based exit taxes, and the rules for payment deferral would also be mirrored. Notably, the amendment specifies that swaps between cryptocurrencies with no cash component would not be treated as sales for the purpose of calculating the exit tax.
However, the reporting requirements would be stringent. Taxpayers would be required to provide a comprehensive statement of all cryptocurrency assets held on the date of their move, regardless of where the assets are geographically "located" or whether they are in private wallets. The legislative intent behind this measure is to address the high mobility of digital assets, which the authors argue makes it easier for wealthy individuals to evade French fiscal obligations by relocating to lower-tax jurisdictions before cashing out their holdings.
A Balanced Approach: Loss Carry-Forward Provisions
Not all proposed changes were restrictive. The committee also adopted an amendment proposed by Daniel Labaronne aimed at providing more equitable treatment for investment losses. Under the current regime, cryptocurrency investors who incur a loss in a given tax year cannot carry those losses forward to offset future gains.
Labaronne’s amendment would allow investors to carry forward crypto-related losses for a period of ten years. This change would align the treatment of digital assets with that of traditional stocks and bonds, acknowledging the inherent volatility of the market and providing a fiscal safety net for long-term investors. Supporters of this measure believe it is a necessary step toward professionalizing the asset class and reducing the "economically unjust" nature of a system that taxes gains but ignores losses.
The Broader Fiscal and Political Landscape
The push for increased crypto taxation comes at a time when France is grappling with significant budgetary pressures and a shifting political landscape. In late October 2025, the National Assembly adopted a separate crypto-inclusive tax in its first reading. That amendment, which passed with a narrow 163-150 vote, established a 1% annual levy on "unproductive" wealth exceeding €2 million. This wealth tax specifically includes digital assets alongside luxury items such as gold and yachts.
The inclusion of cryptocurrency in wealth tax categories has faced sharp criticism from legal and financial experts. Attorney Burçak Ünsal, speaking on the implications of these policies, noted that taxing early token holders on unrealized wealth could be considered economically unjust, particularly given the extreme price fluctuations of the assets involved.
Furthermore, the French proposals coincide with the implementation of the EU’s MiCA framework, which is already reshaping the regional market. Major exchanges, including Coinbase, have already announced plans to delist non-compliant stablecoins for European customers by the end of 2024. This regulatory pressure is nudging users toward compliant tokens like USDC and EURC, which would fall directly under the scope of the proposed French stablecoin tax.
Chronology of Upcoming Events
The legislative journey for these tax amendments is far from over. The following timeline outlines the critical stages for the French budget:
- October 13: The floor debate on the revenue section of the 2027 budget begins in the full National Assembly. Proponents of the crypto amendments must re-introduce them for consideration by the entire body.
- October 20: A formal vote on the revenue section of the budget is scheduled.
- Late 2024 – Early 2025: The budget bill will move to the Senate for further deliberation and potential modification.
- January 1, 2027: If the stablecoin and exit tax amendments survive the legislative gauntlet, they are slated to become effective on this date.
Implications for the French Tech Ecosystem
France has spent the last several years positioning itself as a leading hub for "Web3" and blockchain innovation in Europe. President Emmanuel Macron has frequently spoken about the importance of the digital economy and has supported initiatives to attract major crypto firms to Paris.
However, the introduction of a 31.4% tax on stablecoin swaps could deter active traders and liquidity providers from remaining in the French market. Stablecoins are the lifeblood of decentralized finance (DeFi) and professional trading; by taxing the transition into these assets, the government may inadvertently push high-volume activity to other EU member states with more favorable tax treatments, such as Germany (where crypto held for over a year is often tax-exempt) or Italy (which recently proposed its own tax hikes but maintains different structures).
Industry advocates argue that the stablecoin tax ignores the technical reality of how these assets are used. Unlike selling for fiat, swapping for a stablecoin often represents a temporary move to "park" funds during periods of volatility rather than a final realization of profit. Forcing a tax event at this stage could significantly reduce the compounding potential of crypto investments and increase the administrative burden on retail investors who may perform hundreds of such swaps annually.
The exit tax, while targeting only the wealthiest tier of holders, also sends a signal regarding the "stickiness" of French residency for tech entrepreneurs. As digital assets become a larger portion of the portfolios of startup founders and venture capitalists, the threat of a heavy tax bill upon relocation could influence where new companies choose to incorporate and where their founders decide to live.
As the National Assembly prepares for the October 13 debate, the focus will be on whether the French government can balance its need for increased tax revenue with its stated goal of becoming a global leader in financial technology. The outcome of the floor vote will provide the clearest indication yet of whether France intends to maintain its crypto-friendly posture or pivot toward a more aggressive fiscal oversight of the digital frontier.
