France Proposes 31.4% Tax on Stablecoin Swaps

French lawmakers took a significant step toward changing local cryptocurrency rules on Friday. Members of the National Assembly voted narrowly to pass Amendment I-3898, a proposal that would subject crypto-to-stablecoin exchanges to a 31.4% capital gains tax.

If this measure becomes official law, French crypto holders will face tax obligations every single time they swap a volatile cryptocurrency for a stablecoin.

A Razor-Thin Vote in the National Assembly

The proposed tax change came during debates over the 2027 Finance bill. Member of Parliament Nicolas Sansu filed the amendment, which previously cleared the Finance Committee.

The final vote on the floor was extremely close. It passed by a narrow margin of 38 to 37 votes, with 25 lawmakers abstaining.

Participation was surprisingly low. Out of 577 total assembly members, only 100 lawmakers participated in the vote.

Closing What Lawmakers Call a Tax Loophole

Currently, French crypto traders can exchange volatile digital coins for stablecoins without triggering a tax event.

Traders often use stablecoins as a safe harbor during market swings. Capital gains taxes normally apply only when converting digital assets back into traditional fiat currency like Euros.

Lawmakers argue that stablecoins fulfill basic functions of money, including making payments and investments.

Because of this, legislators view the current tax exemption as an unfair loophole. They argue that taxing these swaps collects valuable revenue without creating a new burden on traditional commerce.

How This Change Could Impact French Traders

Industry analysts caution that this rule could dramatically alter how French investors manage digital assets. Arbitrage and speculative trading strategies rely heavily on tax-free stablecoin swaps.

• Data from Chainalysis shows that 90% of France's crypto gains currently go undeclared.
• For 2024, only 24,000 French taxpayers reported their cryptocurrency earnings.
• Those declared gains totaled nearly $427 million.

Without tax-free stablecoins, investors lose a primary tool for protecting their funds from market volatility.

Exploring Alternatives Like Gold-Linked Tokens

Analysts suggest French crypto holders might explore alternative digital assets to safeguard their capital.

Commodity digital assets, such as gold-backed tokens, could see increased demand as investors attempt to mitigate price swings.

However, experts note this is an imperfect solution because physical commodities like gold experience their own periods of price fluctuation.

Next Steps: The Upcoming Senate Vote

The proposal remains highly controversial, and its final passage is far from guaranteed.

The next major milestone occurs next Tuesday, when the measure moves to the French Senate for review.

The French government currently opposes this amendment. Officials could choose to modify the text, reject it, or approve the broader budget bill without the tax proposal included.

If the proposal passes the legislative process without modifications, the 31.4% tax on crypto-to-stablecoin swaps will go into effect on January 1, 2027.

Market Context and Industry Initiatives

At the time of the Assembly debate, major crypto markets remained steady, with BitcoinBTC+0.04% trading around $81,546 (+0.07%) and EthereumETH+0.22% at $2,418 (+0.42%).

Past performance of digital assets is not a guarantee of future returns.

Debates around stablecoin taxation are not entirely new. Previously, three executives from crypto-linked companies proposed taxing swaps directly, arguing that explicit regulatory rules would eventually accelerate integration into mainstream finance.