Key facts
- France proposed a 31.4% capital gains tax on conversions of cryptocurrencies into regulated stablecoins.
- The proposed tax would take effect from January 1, 2027, if approved by Parliament.
- The measure applies to stablecoins classified as electronic money tokens under the EU's MiCA framework.
- Currently, French investors pay capital gains tax when selling crypto for fiat or purchasing goods.
- Lawmakers also backed mandatory reporting for self-custody crypto wallets holding at least €100,000.
- An amendment would allow taxpayers to deduct crypto losses over 10 years.
France has proposed extending its existing 31.4% cryptocurrency capital gains tax to regulated stablecoin conversions, with the measure slated to take effect in January 2027 if approved. The proposal, which has passed committee discussions in the National Assembly, aims to tax conversions of cryptocurrencies like Bitcoin into stablecoins classified as electronic money tokens under the EU's Markets in Crypto-Assets (MiCA) framework.
Currently, French investors generally face capital gains tax when selling cryptocurrencies for fiat currency or using them to purchase goods. The proposed changes reflect a broader trend of increasing regulatory scrutiny on MiCA-compliant stablecoins across the EU. Circle, a stablecoin issuer, recently urged European regulators to update the conditions for cross-border stablecoin issuers.
The French National Assembly's finance committee approved the budget revenue for 2027, including the crypto tax amendments, by a vote of 31 to three. The legislation will now proceed to full parliamentary debate, with a final vote on the revenue portion of the budget scheduled for October 20. If passed, the new tax rules would be effective from January 1, 2027.
Francois Volpoet, head of Chainalysis's operations in France, suggested that a ban on conversions to regulated stablecoins could push traders towards less transparent platforms, such as decentralized finance protocols and self-custody wallets. Additionally, French lawmakers have supported mandatory reporting for self-custody crypto wallets holding at least €100,000, with potential fines of up to €10,000 for non-compliance. Another amendment proposes increasing the exit tax on crypto holdings exceeding approximately $900,000, while a separate plan would allow investors to deduct crypto losses over a 10-year period.