France Moves Closer to Taxing Stablecoin Conversions
TREE NEWS reports: France’s National Assembly Finance Committee has approved a package of cryptocurrency-related budget amendments, including a tax on stablecoin conversion transactions, an exit tax on crypto assets, and a provision allowing crypto losses to be carried forward for up to 10 years. The committee reviewed ten crypto-related amendments in total; a proposal to extend the personal wealth tax (IFI) to crypto assets was rejected, while several measures concerning self-custody remain under discussion.
What the Amendments Mean
The stablecoin conversion tax is the most consequential item. Until now, many jurisdictions — France included — have treated swaps between crypto assets and fiat-backed stablecoins as non-taxable events, since no fiat currency changes hands. By taxing these conversions, French lawmakers would effectively treat stablecoins as a taxable disposal event, closing a widely used loophole and aligning the treatment of stablecoins more closely with that of traditional financial instruments.
The 10-year loss carryforward is friendlier to investors. It allows capital losses on crypto to offset future gains over a much longer horizon than the current framework permits, softening the impact of volatile market cycles and making crypto investing more structurally comparable to equities or real estate.
The rejected wealth tax expansion is a relief for high-net-worth holders. Had it passed, crypto would have been swept into France’s real estate wealth tax base, potentially forcing annual declarations and liquidity events for long-term holders.
Industry Implications
- Compliance burden rises: Exchanges and custodians serving French clients will need to build new reporting pipelines to identify and tag stablecoin conversions in real time.
- DeFi and self-custody in focus: The committee’s continued debate over self-hosted wallets signals that France is weighing how far to push reporting obligations into non-custodial environments — a flashpoint across the EU.
- MiCA interplay: France’s moves come as the EU’s Markets in Crypto-Assets regulation phases in, raising questions about how national tax rules will layer on top of a harmonized licensing regime.
Forward Look
The amendments must still pass the full National Assembly and survive potential Senate review before becoming law. If enacted, France would join a small but growing group of jurisdictions explicitly taxing stablecoin-to-crypto conversions, and its 10-year loss carryforward could become a model for other EU states seeking to balance investor protection with fiscal revenue. Market participants should watch the self-custody provisions closely — they may prove more consequential for DeFi users than the tax measures themselves.
