France is considering a tax change that would make swaps from cryptocurrencies such as Bitcoin into certain EU-regulated stablecoins taxable from January 1, 2027. Under an amendment approved by a parliamentary finance committee on October 7, conversions into electronic money tokens (EMTs) recognised under the EU’s Markets in Crypto-Assets Regulation (MiCA) would lose their current tax deferral.
The proposal could affect widely used stablecoins such as USDC and EURC. The 31.4% rate would apply to taxable capital gains, not the full value of a swap. The measure remains under parliamentary consideration and is not yet law.
Key Overview
- Proposed tax change: Crypto-to-EMT swaps could become taxable events from January 1, 2027.
- Applicable rate: France’s current 31.4% flat rate comprises 12.8% income tax and 18.6% social contributions on taxable gains.
- Wallet reporting: A separate proposal would require declarations of self-custodied wallets holding at least €100,000 in crypto assets.
- Loss relief: Lawmakers also backed allowing crypto investment losses to be carried forward for up to 10 years.
- Legislative status: Committee backing does not make these measures law; further parliamentary approval is required.
How the Stablecoin Tax Would Work
France currently allows a deferral of taxation on qualifying crypto-to-crypto exchanges that do not involve a cash payment. Tax generally arises when a private investor sells cryptocurrency for conventional currency or uses it to pay for goods or services, subject to the applicable rules.
The proposed amendment would remove that deferral when a trader receives an EMT in exchange. For example, exchanging appreciated Bitcoin for a qualifying dollar- or euro-backed stablecoin could trigger tax on the realised gain even without cashing out into a bank account. The proposal also sets out revised acquisition-cost rules, including transitional choices for assets acquired before 2027.
This distinction matters because USDC and EURC are issued as MiCA-compliant electronic money tokens in the EU. The European regulatory framework began applying its stablecoin provisions on June 30, 2024, and became fully applicable on December 30, 2024. July 1, 2026 was the end of the maximum transition period for certain existing crypto service providers, not MiCA’s overall start date.
Why Industry Representatives Are Concerned
François Volpoet, the regional sales director for France at blockchain analytics company Chainalysis, has warned that targeting regulated stablecoins could encourage traders to use offshore exchanges, peer-to-peer channels or decentralised finance platforms instead.
The concern is that stablecoins operating within European rules may become less attractive for investors seeking to rebalance portfolios without immediately realising taxable gains. Whether trading would actually move elsewhere is uncertain; the effect would depend on the final law, the types of tokens used and taxpayers’ circumstances.
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Wallet Reporting and Crypto Losses Also Under Review
Another finance committee amendment adopted on October 9 proposes declaring self-custodied wallets whose crypto holdings total at least €100,000 at year-end. Its accompanying explanation envisages penalties of up to €10,000 for non-compliance. The proposed disclosure requirement has raised privacy and security concerns, particularly around protecting sensitive information about large holdings.
In a separate move, lawmakers backed a 10-year carry-forward for qualifying crypto losses. Currently, investors generally cannot offset losses against gains in later tax years under the ordinary private-investor crypto tax framework. The proposed change would bring this aspect of crypto taxation closer to the treatment of securities.
Proposals to extend exit-tax rules to large crypto holdings were also discussed, potentially increasing tax considerations for wealthy investors relocating outside France.
What Happens Next for France’s Crypto Tax Rules?
Despite the committee’s support for individual amendments, it subsequently rejected the revenue section of the draft 2027 budget by 31 votes to three. The crypto measures therefore require renewed consideration by the full National Assembly, with a revenue-section vote scheduled for October 20. None of the proposed changes should be treated as an existing tax obligation.
The debate also highlights differing approaches within Europe. Greece has proposed a 10% tax on cryptocurrency capital gains, including a proposed annual exemption for gains of up to €500. Its legislation is likewise still at the proposal stage.
For French crypto investors, the immediate issue is not a tax already imposed on stablecoin swaps, but whether lawmakers will remove a longstanding tax deferral as part of the 2027 budget.
Sources: Assemblée nationale / French Tax Administration / European Commission / Circle / CoinDesk / Reuters
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