France Approves Proposal to Tax Stablecoin Gains at 31%

French lawmakers have narrowly backed a proposal that would tax profits when investors exchange cryptocurrencies for stablecoins, potentially bringing these transactions under the country’s 31.4% capital gains tax rate.

The National Assembly approved amendment I-3898 to the 2027 budget on October 16, with 38 votes in favor, 37 against, and 25 abstentions. The decision advances a measure that had previously received support from the assembly’s finance committee.

The proposed rules would take effect on January 1, 2027, and apply to transactions conducted from that date. However, the amendment must still pass the remaining stages of the budget process and could be revised or rejected before it becomes law.

Under France’s existing tax framework, crypto-to-crypto exchanges that do not involve an additional cash payment generally qualify for tax deferral. Private investment gains are normally subject to a 31.4% tax rate, although investors can choose to be taxed under the progressive income-tax system instead.

The amendment would end this deferral for transactions involving electronic money tokens, including stablecoins that meet the definition established under the European Union’s Markets in Crypto-Assets (MiCA) regulation.

As a result, investors could face a tax bill when converting cryptocurrency holdings into qualifying stablecoins, even if they do not cash out into fiat currency or transfer the proceeds to a bank account.

The proposal has raised concerns about its potential impact on crypto trading activity. Francois Volpoet, Chainalysis’ regional sales director for France, told CoinDesk last week that the measure could drive investors toward decentralized finance platforms, peer-to-peer trades, and offshore exchanges operating outside international tax-reporting frameworks.

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

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

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

Beyond changing the treatment of stablecoin transactions, the amendment would also revise how capital gains are calculated. Instead of assessing gains across an investor’s entire portfolio, the proposed method would calculate profits based on the acquisition cost of the assets sold. For units of the same cryptocurrency purchased at different prices, a weighted-average cost would be used.