French National Assembly Passes Stablecoin Conversion Tax 38-37

Update 16:23 UTC: Elsewhere in the debate, a Chainalysis official, François Vohlé, warned that investors could shift activity to decentralized exchanges and offshore platforms if the deferral disappears, with particular concern over transactions falling outside international tax-reporting regimes.

A One-Vote Margin in Paris

France's National Assembly adopted amendment I-3898 by the narrowest of margins on Friday, October 16, approving a measure that would tax capital gains realized when virtual assets are exchanged for stablecoins. The count stood at 38 in favor, 37 against, with 25 abstentions, and only 100 of the chamber's 577 deputies took part in the ballot. The amendment, sponsored by deputy Nicolas Sansu, cleared the Assembly's finance committee on October 7 and returned to the floor as part of deliberations on the 2027 budget bill. Its text, published in the Assembly's amendment record, brings transactions that convert crypto assets into a stablecoin pegged to a single fiat currency into the scope of France's capital gains regime. Under current rules, a French resident who sells crypto for euros, or exchanges it for goods and services, owes tax on the gain, while a swap between two crypto assets without additional consideration is deferred. The amendment removes that deferral for conversions into qualifying stablecoins, on the argument that such tokens already perform some functions of money, including payment and investment. The same document states the change “creates no new burden,” since the identical gain would still be taxed when the holder eventually exits to fiat. Minister David Amiel told the chamber during the session that the definition of stablecoins and the traceability of asset rebalancing inside a wallet still require review, a sign the scope could shift before any final text. Adoption on the floor is not the end of the process: the bill still faces government review, Senate consideration and confirmation of the 2027 budget, leaving the planned January 1, 2027 entry into force undecided.

The 31.4% Flat Tax and Senate Odds

The rate at stake is not new. French tax authorities already apply the single flat-rate deduction, the PFU, at 31.4% to capital gains individuals realize on crypto disposals, composed of 12.8% income tax and 18.6% social contributions, and it is the gain, not the full conversion amount, that would fall due. What changes is timing. Traders commonly route proceeds into stablecoins to hold gains outside the taxable perimeter, then redeploy the balance as margin for futures trading or sit through volatility before a final fiat exit, all without triggering the levy, a pattern that intensifies when traders want to lock profits during a bull market. Ending that deferral would land hardest on arbitrage and speculative strategies. The scale of undeclared activity explains why the Assembly's majority pushed the measure: analytics firm Chainalysis estimates 90% of French crypto gains go unreported, and only about 24,000 French taxpayers declared close to $427 million in gains in 2024. Analysts argue the rule, if enacted, would strip French holders of a standard tool for stepping out of volatile positions and slow stablecoin adoption domestically, while some expect holders to weigh commodity-backed tokens such as gold-pegged assets, even though gold carries high-volatility stretches of its own. A Paris law firm reviewing the text interprets it as covering only stablecoins pegged to a single legal-tender currency, not broader designs, and notes the scope and calculation method can still change in the final wording. Government opposition persists, and officials could strip the amendment or advance the unmodified initial draft, so the measure may yet be reshaped before the budget is approved. Some in the market also expect users to move holdings into self-custody hardware such as Tangem Pay to keep balances outside the reporting perimeter.

Our read is that timing, not the 31.4% rate, is the operative change: the amendment turns every swap into a euro- or dollar-pegged token into a taxable disposal, closing the deferral French traders have used to recycle gains between positions. A one-vote margin, 25 abstentions and open government hostility make the Senate stage genuinely uncertain, and a Senate rewrite could narrow the definition of qualifying stablecoins or address the wallet-rebalancing questions Minister Amiel flagged. The proposal has already generated FUD across French trading desks, and if the deferral disappears we expect routing behavior to shift toward commodity-backed tokens and self-custody well before any January 1, 2027 start date is confirmed.

The next procedural step now has a date: the vote that determines whether the amendment moves to the Senate is scheduled for October 20, according to the latest reports on the measure. French media have also flagged the government's options at that stage, with officials weighing whether to remove the amendment from the text altogether or to advance the budget bill in its original, unmodified form, bypassing the stablecoin change entirely. Should the provision survive both the transfer vote and Senate review without edits, the 31.4% levy on crypto-to-stablecoin conversions would take effect on January 1, 2027, curbing the practice of parking realized gains in tokens until a fiat exit. Analysts continue to warn the change could dampen domestic stablecoin usage, though gold-pegged tokens carry volatility risks of their own.

New detail on the amendment's mechanics shows the taxable perimeter is narrower than a blanket stablecoin rule: the text amends Article 150 VH bis of the general tax code to strip deferral only for swaps into e-money tokens (EMT) and related rights as defined under the EU's MiCA framework, tokens such as USDC and euro-pegged EURC, rather than every fiat-pegged design. The proposal also reworks the acquisition-cost method for computing gains, replacing the current portfolio-wide pro-rata approach with a weighted average cost basis per asset, with transitional relief letting holders of pre-2027 assets choose between actual cost or an allocation of the December 31, 2026 portfolio value, a choice that cannot be revoked. The schedule confirms the full budget bill goes to a floor vote on November 17 before Senate review begins.

Elsewhere in the debate, a Chainalysis official, François Vohlé, warned that investors could shift activity to decentralized exchanges and offshore platforms if the deferral disappears, with particular concern over transactions falling outside international tax-reporting regimes. Separately, deputies are weighing a reporting obligation for large self-custody wallets, those holding more than €100,000, backed by fines of up to €10,000 for non-compliance. The fiscal backdrop sharpens the stakes: the government aims to cut the deficit from 5.4% of GDP this year to 5% in 2027, even as weeks of cost-of-living protests turned violent and left more than 2,500 people in custody, and Sansu has argued that investors should not avoid immediate taxation simply by converting Bitcoin into dollar-backed tokens rather than euros.