France’s National Assembly has approved a budget amendment that would make certain crypto-to-stablecoin swaps taxable from January 1, 2027. If enacted, investors could face the country’s default 31.4% capital gains tax when moving into qualifying stablecoins, even without withdrawing money to a bank account.
Lawmakers adopted amendment I-3898 on October 16 by 38 votes to 37, with 25 abstentions, according to the Assembly’s official voting record. The measure still needs to survive the remaining budget process before becoming law.
For traders, the proposal could change the economics of moving out of volatile assets. A separate amendment would introduce reporting obligations for substantial self-custodied holdings.
What the France Stablecoin Tax Would Change
French tax guidance currently allows crypto-to-crypto exchanges without an additional cash payment to benefit from tax deferral. For private investors, taxable crypto gains generally face a default rate of 31.4%, comprising 12.8% income tax and 18.6% social contributions. An option to use the progressive income-tax scale also exists.
The amendment would remove that deferral when an investor receives an electronic money token, or EMT, as defined under the EU’s Markets in Crypto-Assets regulation.
MiCA defines this category by reference to a single official currency. The legal classification matters: “stablecoin” is a broader market term, and the proposal should not automatically be described as covering every token marketed that way. Nor does the definition alone establish that a particular issuer has regulatory authorization.
The change would therefore expand the transactions that trigger taxation rather than create a separate 31.4% tax on the gross value of each swap.
What Traders Could Owe: A Simple Example
Consider a simplified hypothetical transaction. An investor buys cryptocurrency for €10,000 and later exchanges the entire position for qualifying stablecoins worth €15,000.
Assuming a taxable gain of €5,000 and application of the 31.4% rate, the resulting tax would be €1,570—not €4,710 on the full €15,000 conversion. Fees, other transactions, losses and the investor’s tax treatment could change the final calculation.
That illustrates the main cash-flow consequence: an investor could crystallize a tax liability while keeping the proceeds in crypto.
Moving into stablecoins would still reduce exposure to the original asset’s price movements. However, the investor would need to account for the tax liability before deciding how much capital remained available for another trade.
The proposal also changes the calculation method. Instead of France’s portfolio-wide approach, it would use the acquisition cost of the assets sold, with a weighted average for units of the same cryptocurrency purchased at different prices. That would make accurate acquisition records particularly important.
Why Approval Could Change Trading Behavior
One possible consequence is greater hesitation before rotating profitable positions into stablecoins. Traders would have to weigh the benefit of reducing market exposure against the timing of a taxable disposal.
This does not mean every conversion would generate a tax bill: a trade must produce taxable gains under the applicable rules. It also does not establish that investors would necessarily trade less. Some might change their holding periods, execution strategies or choice of assets instead.
There is a second potential problem when traders reinvest. A profitable stablecoin conversion could establish a liability, while subsequent investments could fall in value. Whether losses offset earlier gains depends on the applicable rules and timing. French tax guidance currently limits crypto loss offsets to gains of the same nature in the same year, without carrying those losses into later years.
Industry participants have also warned about migration toward less transparent venues. Chainalysis’ France regional sales director, Francois Volpoet, told CoinDesk the proposal could encourage DeFi, peer-to-peer trading and offshore platforms outside international reporting arrangements. That is a warning about possible behavior, not evidence that an exodus has already occurred.
These potential responses should not be confused with a legal exemption. Neither using a decentralized interface nor keeping funds off a bank account, by itself, establishes that a transaction falls outside the proposed rule.
Self-Custody Wallets Face a Separate Reporting Proposal
Another budget amendment, I-2701, targets disclosure of directly held crypto-assets rather than gains from stablecoin conversions.
Its text would require reporting where relevant self-custodied holdings have a total value of at least €100,000 on December 31 of the reporting year. The explanatory note describes penalties of up to €10,000 for non-declaration. The Assembly page lists the amendment as being processed, rather than enacted.
This is not specifically a tax on hardware wallets. The proposed distinction concerns whether assets are held directly or with a crypto-asset service provider. Self-custody can involve either a hardware device or a software wallet.
If adopted, the reporting obligation could require affected holders to maintain reliable year-end valuations alongside transaction histories. Holding assets without selling them could become relevant for disclosure even when no capital gain had been realized.
That reporting duty and the stablecoin tax proposal are separate measures. Approval of one does not automatically enact the other.
What Happens Before the Rules Can Take Effect?
The October 16 vote approved an amendment during the budget’s first reading; it did not complete the legislative process. Cointelegraph reported on October 20 that the Assembly’s vote on the budget’s revenue section had been postponed. The stablecoin measure could still change or disappear during subsequent proceedings.
For investors and platforms, the decisive document will be the final enacted text. Its scope, commencement provisions and implementation guidance would determine how transactions must be recorded and reported.
Until then, January 1, 2027 remains a proposed start date. The immediate development is that taxing gains on qualifying stablecoin swaps has advanced in the Assembly—not that France has already introduced a tax on every stablecoin conversion.