France Proposes 31.4% Tax on Crypto to Stablecoin Conversions Starting 2027

France has proposed extending its 31.4% cryptocurrency capital gains tax to regulated stablecoin conversions beginning January 2027, although parliamentary opposition has left the measure awaiting further debate and approval.

France’s 31.4% Crypto Tax Proposal Targets Stablecoin Swaps

The French National Assembly’s amendment confirms that lawmakers approved the proposed stablecoin tax changes during committee discussions on October 7.

Under the proposal, France would impose capital gains tax when investors convert Bitcoin or other Crypto into stablecoins classified as electronic money tokens. The measure will apply to stablecoins subject to the EU’s Markets in Crypto-Assets (MiCA) framework.

Currently, French investors generally pay capital gains tax when selling cryptocurrencies for fiat money or purchasing goods. Transfers of cryptocurrencies typically are not taxable until investors have made a taxable transfer.

The proposed changes come on the heels of increasing regulatory focus on MiCA compliant stablecoins in the EU. On October 2, Circle called on regulators in Europe to update the conditions applicable to stablecoins cross-border issuers.

French Lawmakers Face October 20 Budget Vote

The National Assembly’s finance committee then passed the government’s budget revenue for 2027 by 31 votes to three. Therefore, the approved amendments to the crypto laws should be submitted again for full parliamentary debate.

The proposed tax has not yet been passed; lawmakers are set to vote on the revenue portion of the budget Oct. 20. If Parliament approves the necessary legislation, it would be effective from January 1, 2027.

Chainalysis’ Francois Volpoet, the head of its operations in France, said that banning conversions of regulated stablecoins would likely prompt traders to look for more opaque options. He noted that decentralized finance platforms and self-custody wallets might serve as an alternative to regulated trading services.

France Considers Additional Crypto Tax Reporting Rules

Separately, French lawmakers have backed mandatory reporting for self-custody crypto wallets holding at least €100,000. The proposal would impose fines up to €10,000 on people who do not report holdings that would qualify for the exemption.

Another committee amendment would raise the France exit tax to crypto holdings over roughly $900,000. The current system covers some investment gains in the event of a qualifying taxpayer relocating their tax residence to another country.

Meanwhile, lawmakers approved an alternate plan to provide investors with a way to deduct crypto losses over a period of 10 years. The amendment would change how taxpayers account for losses against future taxable gains if Parliament approves it.