Stablecoin Traders Face Proposed 31% Tax as French Parliament Approves Measure

France’s National Assembly has narrowly backed a proposal to tax profits from cryptocurrency-to-stablecoin exchanges at the country’s 31.4% capital gains rate, potentially changing the way investors handle digital assets.

On October 16, lawmakers approved amendment I-3898 to the 2027 budget by 38 votes to 37, with 25 abstentions. The measure had already gained support from the assembly’s finance committee, and the latest vote moves it further through the legislative process.

The proposed rules would apply from January 1, 2027, if they become law. However, the amendment must still clear the remaining parliamentary stages and could be revised or removed before the budget receives final approval.

Currently, French tax rules generally allow investors to defer taxation on crypto-to-crypto exchanges when no additional cash payment is involved. Private investment gains are typically taxed at 31.4%, although taxpayers can opt for the progressive income-tax system.

The amendment would end this deferral for electronic money tokens covered by the European Union’s Markets in Crypto-Assets (MiCA) framework, including eligible stablecoins.

Under the proposed system, investors could owe capital gains tax when exchanging cryptocurrency for qualifying stablecoins, even if they keep their funds in the crypto market instead of converting them into fiat currency or transferring them to a bank account.

The proposal has sparked concerns about its potential effect on trading activity in France. Francois Volpoet, Chainalysis’ regional sales director for France, told CoinDesk last week that the change could encourage investors to move toward decentralized finance platforms, peer-to-peer trading, and offshore exchanges that fall outside international tax-reporting arrangements.

Public Accounts Minister David Amiel questioned whether the measure could be implemented effectively and called for its withdrawal, saying he would otherwise oppose it.

“We first need to define stablecoins, then ensure our ability to monitor and trace reallocations within a portfolio of assets,” Amiel said during the parliamentary debate.

Philippe Juvin, the finance committee’s rapporteur general, also supported keeping the current tax deferral, citing the high volatility of cryptocurrency markets.

Beyond the treatment of stablecoin transactions, the amendment would change how taxable gains are calculated. Instead of assessing gains across an investor’s entire portfolio, the proposed method would use the acquisition cost of the assets sold. For units of the same cryptocurrency bought at different prices, a weighted-average acquisition cost would be used to determine the taxable profit.