France's National Assembly votes to tax crypto-to-stablecoin swaps

France's National Assembly has adopted a measure to tax the conversion of crypto into stablecoins. Deputies backed amendment I-3898 to the 2027 budget on 16 October by 38 votes to 37, with 25 abstentions. It would close a gap in current tax law.

The vote came during debate on the 2027 finance bill, the text France uses to set each year's taxes and spending. Nicolas Sansu, a deputy from the left-wing Gauche democrate et republicaine group, filed the amendment with 16 colleagues. Its published text changes Article 150 VH bis of the French tax code, which governs how individuals are taxed on digital-asset gains.

What the amendment would change

Today, French investors pay no tax when they trade one crypto-asset for another. The bill falls due only when they cash out to euros or another regular currency. Swapping bitcoin for a stablecoin such as USD Coin (USDC) counts as crypto-to-crypto. So it slips through untaxed. This amendment removes that deferral for swaps into stablecoins.

Those gains would face France's flat tax on capital income, known as the prelevement forfaitaire unique. That rate is 31.4%, made up of 12.8% income tax and 18.6% in social charges. It climbed from 30% this year after a social security law raised the social-charge share. Investors could instead choose the progressive income-tax scale where that costs less. The rules would apply to transactions from 1 January 2027.

It is similar to taxing an investor the moment they move money from one fund into another, before any cash reaches a bank account. Many traders park value in stablecoins to sit out sharp price swings without returning to the banking system. That habit would now carry a tax bill.

Why the government pushed back

David Amiel, the public accounts minister, asked deputies to withdraw the amendment. He argued that the law first needs a clear definition of what a stablecoin is. "We first need to define stablecoins," Amiel said, warning that shifts inside a portfolio would be hard to trace.

Philippe Juvin, the finance committee's general rapporteur, wanted to keep the current deferral. He pointed to how fast crypto prices move, which can leave an investor owing tax on a paper gain that later disappears. Neither argument carried. The measure passed anyway. By one vote.

Francois Volpoet, Chainalysis' regional sales director for France, said the levy could push traders toward decentralized platforms, peer-to-peer deals and offshore venues beyond France's tax-reporting reach. The amendment itself points to electronic money tokens as defined under the European Union's MiCA rules, the same category the bloc used when it named USDC a significant e-money token. One reading from Chainalysis, relayed in French coverage, saw that as capturing tokens like USDC and the euro-backed EURC while leaving Tether (USDT), which is not authorized as a MiCA e-money token, outside the net. Neither the amendment nor the tax authority has published a list of covered tokens.

Still far from becoming law

Adoption by the National Assembly is only the start. The amendment sits inside the first part of the 2027 budget, which covers state revenue, and that part has not yet passed. A solemn vote on it was expected on 20 October, then put off while deputies worked through the separate social security budget and thousands of outstanding amendments.

Even if the revenue section clears the lower house, the budget then goes to the Senate, which can rewrite or drop what deputies added. La Gazette des communes, a French public-finance outlet, reported that a rejection of the whole first part looks likely after a run of government defeats on other tax measures. Nothing here is settled.

Stablecoins were not the only crypto target in the debate. Deputies are still weighing an exit tax that would reach unrealized crypto gains for residents with portfolios above 800,000 euros who move their home abroad, plus a rule forcing holders to declare self-custodied wallets worth more than 100,000 euros. A separate bid to let investors carry crypto losses forward for 10 years was rejected, 18 votes to 75, with three abstentions.

What to watch

Next comes the solemn vote on the budget's revenue side, now delayed with no firm date. If deputies throw out that section, the stablecoin measure falls with it and the government returns to its original text. If they keep it, the fight shifts to the Senate.

France is not alone in rethinking crypto tax. Germany's cabinet has weighed its own bill to end tax-free treatment of long-held coins. For now, 1 January 2027 is the date this amendment aims at, and it remains far off.