French National Assembly Finance Committee Approves Tax on Crypto-to-Stablecoin Conversions Effective 2027

This legislative move signals a tightening grip on cryptocurrency taxation in Europe, impacting how digital assets are treated across the continent.

• The French National Assembly Finance Committee approved amendments to tax Bitcoin-to-stablecoin conversions starting January 1, 2027.
• The measures aim to close tax loopholes that allow crypto gains to be deferred until fiat conversion.
• The proposals include a 10-year loss carryforward and an exit tax on unrealized gains for high-asset households relocating abroad.

• Current tax rules in France defer capital gains taxation on crypto-to-crypto exchanges until conversion to fiat currency.
• The EU's MiCA regulation defines stablecoins and mandates crypto service provider reporting, which aligns with these new proposals.
• The amendments are part of broader European efforts to regulate digital assets and enhance fiscal oversight in the sector.

The French National Assembly Finance Committee's recent approval of tax amendments reflects a significant shift in how cryptocurrencies will be taxed, particularly concerning conversions to stablecoins. This decision, led by MP Nicolas Sansu and supported by 16 deputies from the GDR group, aims to address a perceived legislative gap that has allowed crypto gains to be sheltered in stablecoins without immediate taxation.

Currently, under Article 150 VH bis of the General Tax Code, capital gains from crypto-to-crypto exchanges are not taxed until the assets are converted to fiat currency or used for purchases. This has created a scenario where investors could hold their gains in stablecoins, effectively deferring tax liabilities indefinitely. The new amendments will change this by treating conversions to MiCA-regulated stablecoins as taxable events, thus ensuring that gains are taxed at the point of conversion rather than at the point of fiat withdrawal.

The proposed measures also include a 10-year loss carryforward, allowing investors to offset future gains with past losses, which could provide some relief for those facing tax liabilities. Additionally, an exit tax on unrealized gains will apply to households with over €800,000 in crypto assets relocating abroad, further tightening the tax net around high-net-worth individuals in the crypto space.

The implications of these changes are significant. They not only expand the tax base amid growing crypto adoption but also align France's regulatory framework with broader EU initiatives, such as the DAC8 rules that require crypto service providers to report transactions starting in 2026. This alignment is crucial as it reflects a collective European approach to regulating digital assets, which is increasingly seen as necessary to ensure fiscal accountability and transparency in a rapidly evolving market.

Market reactions to the proposed amendments have already begun to surface, with shifts in Bitcoin price prediction markets indicating increased regulatory uncertainty. Investors are likely to adjust their strategies in anticipation of these changes, which could lead to accelerated taxable events as individuals seek to realize gains before the new tax regime takes effect.

• Crypto investors: Those actively trading or holding cryptocurrencies will face new tax liabilities.
• High-net-worth individuals: Households with significant crypto assets relocating abroad will be impacted by the exit tax.
• Crypto service providers: Companies facilitating crypto transactions will need to adapt to new reporting requirements.

• Full National Assembly debate: The upcoming discussions starting October 13, 2026, will determine if the amendments are finalized and implemented.
• Market reactions: Watch for shifts in Bitcoin and stablecoin prices as investors adjust to the new tax landscape.
• EU regulatory alignment: Monitor how other EU countries respond to similar tax proposals and regulations, particularly in light of the DAC8 framework.