French Lower House Passes Amendment to Tax Crypto Gains on Stablecoin Conversions; Senate Review Pending

31.4% tax on capital gains even without cashing out

Government opposes measure; Senate and further legislative review remain

France’s lower house has approved a measure that would tax investment gains when crypto assets are converted into stablecoins. The move would change the current system, under which taxation can be deferred until assets are exchanged into fiat currency.

The National Assembly on October 16 approved the amendment during deliberations on the 2027 budget by 38 votes to 37, with 25 abstentions. The proposal, introduced by lawmaker Nicolas Sansu and others, passed by a single vote.

The bill’s core provision is to make conversions into stablecoins pegged to a single fiat currency a taxable event. The amendment uses the European Union’s Markets in Crypto-Assets, or MiCA, definition of electronic money tokens. If finally enacted, the rule would take effect on Jan. 1 next year.

Under current French rules, taxation can be deferred under certain conditions when individuals exchange one crypto asset for another. That means an investor who converts Bitcoin into a stablecoin after a price gain can postpone paying tax until the holdings are cashed out into euros or another fiat currency.

If the amendment takes effect, tax would be imposed on gains at that conversion stage. France’s current flat rate is 31.4%, combining a 12.8% income tax and an 18.6% social levy. The tax would apply to investment gains, not the full transaction amount.

Lawmakers behind the measure argued that stablecoins are used for payments and reinvestment, leaving no reason to treat them differently from conversions into fiat currency. The government opposed the amendment, arguing that the scope of stablecoins and methods for tracking transactions should be clarified first. In its current form, it said, implementation would be overly complex and the amendment should be withdrawn.

The amendment was adopted during the lower house’s first review of the budget bill. It still must go through the Senate and subsequent legislative procedures.