France proposes taxing swaps into regulated stablecoins at 31.4 percent, and a registry for large self-hosted wallets

What happened

France is debating a package of crypto tax changes that would, for the first time, tax the act of swapping a cryptocurrency into a regulated stablecoin. The proposal sits inside the country's 2027 budget, which lawmakers began debating in the National Assembly last week and have until December 10 to pass. An amendment adopted by the Assembly's finance committee on October 7 would make it a taxable event when an investor exchanges a cryptocurrency such as bitcoin for a stablecoin classified as an electronic money token under the European Union's MiCA regulation, which came into full force on July 1. The tax would apply at France's existing flat capital gains rate of 31.4 percent, starting January 1, 2027.

That is a structural change, not a rate change. Under current French rules, swapping one cryptocurrency for another generally does not trigger capital gains tax. The tax falls due when an investor cashes out into regular currency or spends the holdings. The amendment breaks that symmetry for one specific destination: moving into a MiCA-regulated stablecoin would be treated like cashing out, while moving into an unregulated stablecoin, or into another volatile token, would not.

Two companion measures widen the package. A second amendment, backed by the finance committee on October 9, would require French taxpayers to declare self-hosted crypto wallets holding at least 100,000 euros in assets, with fines for failing to comply. A third would extend France's exit tax to crypto holdings worth roughly 900,000 dollars, bringing unrealized crypto gains under the rules already applied to wealthy shareholders who move abroad. Not everything in the package tightens the screws: a separate amendment backed on October 7 would let investors carry forward crypto losses for up to 10 years, bringing their treatment closer to that of stocks.

None of it is law yet, and the path just got harder. The finance committee subsequently rejected the revenue section of the government's 2027 budget by 31 votes to 3, which means the crypto amendments must be submitted again for debate in the full National Assembly. Lawmakers are scheduled to vote on the revenue section on October 20.

The industry pushback arrived quickly and made an unusual argument. Chainalysis, the blockchain analytics firm, warned that taxing swaps into regulated stablecoins could push investors toward less transparent stablecoins outside the EU framework, and toward decentralized platforms and self-hosted wallets that authorities find harder to monitor. In the firm's framing, the measure taxes precisely the transactions that happen inside the regulated perimeter, where they are easiest to observe, and leaves the unobserved alternatives untaxed. The firm also raised a security objection to the wallet declaration measure, pointing to a rise in physical attacks targeting crypto holders in France. As of July, Europe had recorded 39 of 52 global incidents of that kind, and France alone accounted for 33 of them, or 63.5 percent of the worldwide total.

Why it matters

Tax rules shape behaviour at the margin they touch, and this margin is oddly chosen. A French investor who wants to de-risk a position into a stablecoin after this change would face a tax bill for choosing the EU-regulated token and no tax bill for choosing an offshore one. That is the opposite of the incentive structure MiCA was built to create. MiCA's electronic money token category exists so that European users hold stablecoins issued under European supervision, with reserve and redemption rules attached. A national tax that singles out that category for worse treatment than its unregulated competitors works against the bloc's own framework, and it does so in one of the EU's largest crypto markets.

The wallet declaration measure raises a different problem, one of data safety rather than incentives. A state registry linking identified taxpayers to self-hosted wallets above a 100,000 euro threshold concentrates exactly the information that the recent wave of physical attacks in France has targeted. The Chainalysis objection is worth taking seriously because it is not an argument against taxation in general: it is an argument that this particular disclosure, in this particular country, at this particular moment, creates a list whose leak would endanger the people on it. France's 33 incidents this year are the context that makes the proposal more than an administrative formality.

The rest of the package cuts both ways, which is why calling it simply a crackdown misses the shape of it. The exit tax extension and the wallet declaration point toward a state that wants visibility and a claim on large holdings. The 10 year loss carryforward points the other way, toward normalizing crypto as an asset class taxed like equities, losses included. French crypto tax has long been criticized for taxing gains like an investment while treating losses worse than one. If the loss measure survives and the stablecoin measure does not, the package's centre of gravity changes completely.

The comparison inside Europe sharpens the stakes. While France debates expanding its 31.4 percent net, Greece is preparing a 10 percent capital gains tax on cryptocurrency under a draft bill published last week for public consultation, which would put it among the EU countries with the lowest crypto taxes. Germany, France and Italy are setting or planning rates above 25 percent. Mobile capital and mobile founders read those gaps, and an exit tax exists precisely because they do.

What to watch

Watch the October 20 vote on the revenue section. Because the finance committee rejected that section 31 to 3, every crypto amendment has to be reintroduced and argued again in the full Assembly. Which ones get reintroduced, and in what form, is the first real signal of what survives.

Watch whether the stablecoin amendment is redrafted. A version that taxed swaps into all stablecoins equally would answer the perverse incentive objection while keeping the revenue goal. A version that keeps targeting only MiCA electronic money tokens keeps the flaw Chainalysis identified.

Watch the wallet declaration threshold and its safeguards. Any movement on the 100,000 euro line, and any detail on how the declared data would be stored, who can access it, and what penalties attach to a leak, matters more than the headline obligation.

And watch the calendar. The budget must pass by December 10, and the proposed start date for the stablecoin tax is January 1, 2027. A measure that becomes law in December and takes effect weeks later leaves exchanges and taxpayers almost no implementation runway, which is itself a reason the final text may slip a year.