France's National Assembly has narrowly approved an amendment that would impose capital gains tax on cryptocurrency conversions into regulated stablecoins, potentially changing how investors manage their digital assets.
The October 16 vote passed by a single-vote margin, with 38 lawmakers supporting the proposal, 37 opposing it and 25 abstaining.
The amendment, designated I-3898, forms part of France's proposed 2027 budget and would take effect on January 1, 2027, if enacted.
Currently, French investors can generally exchange cryptocurrencies without triggering capital gains tax, provided they do not convert their holdings into traditional currency or spend them.
Under the proposed rules, swapping Bitcoin or other cryptocurrencies into qualifying euro- or dollar-pegged stablecoins would become a taxable event.
However, the amendment's approval does not mean the measure has become law.
Stablecoin Swaps Could Face 31.4% Tax
The amendment specifically targets electronic money tokens regulated under the European Union's Markets in Crypto-Assets Regulation (MiCA).
These include qualifying stablecoins pegged to a single official currency, such as the euro or US dollar.
Under the proposal, converting cryptocurrency into these tokens would be treated similarly to selling digital assets.
Investors would owe tax on the difference between the value of stablecoins received and the acquisition cost of the cryptocurrency exchanged.
France's current flat tax on qualifying cryptocurrency gains stands at 31.4%, following an increase in social charges on capital income.
Importantly, the 31.4% rate would apply to taxable gains rather than the entire transaction value.
The amendment's supporters argue that stablecoins can function similarly to conventional financial assets and should not automatically allow investors to defer taxation.
New Rules Would Change Crypto Cost Calculations
Beyond introducing taxable stablecoin conversions, the amendment would significantly change how cryptocurrency acquisition costs are calculated.
Instead of determining gains using an overall portfolio-based method, investors would calculate profits separately for each cryptocurrency sold.
When an investor purchased the same cryptocurrency multiple times, the acquisition cost would be determined using an average purchase price.
For assets acquired before 2027, investors would receive a one-time, irrevocable choice between two calculation methods.
They could document the actual acquisition costs of individual assets or allocate their portfolio's total acquisition cost across holdings recorded on December 31, 2026.
The change could introduce additional recordkeeping requirements for cryptocurrency investors.
French Government Opposes the Proposal
The amendment was introduced by lawmakers led by Nicolas Sansu of the left-wing Democratic and Republican Left group.
Its supporters argue that stablecoin conversions currently create a gap in France's cryptocurrency taxation framework.
According to the amendment's authors, investors can move realized cryptocurrency gains into stablecoins without immediately paying capital gains tax.
However, the French government opposed the measure during parliamentary discussions.
Public Accounts Minister David Amiel requested its withdrawal, arguing that lawmakers should first establish clearer legal definitions for stablecoins.
He also raised concerns about the government's ability to trace transactions and reallocations within cryptocurrency portfolios.
Despite those objections, the amendment secured enough votes to advance.
France Considers Broader Crypto Tax Restrictions
The stablecoin proposal is part of a broader effort to tighten cryptocurrency taxation and reporting requirements in France.
Earlier in October, the National Assembly's Finance Committee supported a proposal to extend the country's exit tax to cryptocurrency holdings exceeding €800,000.
Another amendment would require investors holding at least €100,000 in self-custodied cryptocurrency assets to declare those holdings annually.
Failure to comply could result in fines reaching €10,000.
The proposed disclosure requirement has attracted criticism from cryptocurrency industry representatives concerned about investor privacy and physical security.
France has experienced several high-profile attacks targeting cryptocurrency holders, increasing concerns about the potential consequences of sensitive financial information being exposed.
Final Approval Still Required
Despite the narrow parliamentary victory, France's proposed stablecoin tax is not yet legally binding.
The National Assembly must still approve the broader revenue section of the 2027 budget before the legislation proceeds through the remaining parliamentary process.
The proposal could therefore be modified, rejected or removed before final adoption.
If enacted, the changes would make conversions into MiCA-regulated stablecoins taxable starting January 1, 2027.
For cryptocurrency investors, the measure could significantly affect trading strategies, tax calculations and the use of stablecoins to manage market volatility.
The vote represents an important legislative development, but the final outcome will depend on the remaining budget negotiations and parliamentary approval.
