France’s National Assembly has narrowly approved a proposal to tax crypto-to-stablecoin conversions from January 2027, potentially exposing investors to a 31.4% tax on realised gains even when they do not cash out into euros.
France’s cryptocurrency tax policy could be heading for a significant change after the National Assembly narrowly approved an amendment to the country’s 2027 budget that would make certain crypto-to-stablecoin swaps taxable events.
The amendment, numbered I-3898, passed on October 16, 2026, by 38 votes to 37, with 25 lawmakers abstaining. The proposal would end the tax deferral currently available for crypto-to-crypto transactions when investors convert their digital assets into qualifying stablecoins.
However, the amendment is not yet law. It must survive the remaining parliamentary budget process before the proposed rules can take effect.
France Proposes 31.4% Tax on Crypto-to-Stablecoin Swaps
Under the proposed amendment, cryptocurrency investors could face capital gains tax when exchanging digital assets for stablecoins linked to a single official currency, including qualifying tokens such as USDC and EURC.
Under France’s existing rules, individual investors generally defer capital gains tax on crypto-to-crypto exchanges until they sell their assets for euros or use them to purchase goods or services. The proposed change would remove that deferral for transactions involving stablecoins classified as electronic money tokens under the European Union’s Markets in Crypto-Assets (MiCA) framework.
If enacted, the amendment would treat qualifying crypto-to-stablecoin conversions similarly to taxable disposals. The proposed rules are scheduled to apply to transactions carried out from January 1, 2027.
France’s applicable flat tax rate on investment gains is 31.4%, although eligible taxpayers may have the option of taxation under the progressive income-tax scale. The actual tax liability would depend on the investor’s circumstances and the final legislation.
The key implication is that investors could owe tax on realised gains even if they keep their funds within the crypto ecosystem instead of withdrawing them into a traditional bank account.
A Closely Divided Vote in the National Assembly
The amendment secured approval by the narrowest possible margin, highlighting the political divisions surrounding the proposed tax treatment.
Of the 100 lawmakers who participated in the vote, 38 supported the amendment, 37 opposed it and 25 abstained. The proposal therefore received the 38 votes required to secure an absolute majority of votes cast.
The measure was introduced by Nicolas Sansu of the Democratic and Republican Left group as part of the debate on France’s 2027 finance bill.
Supporters argue that converting a cryptocurrency into a fiat-backed stablecoin can allow investors to preserve the value of their gains without formally converting their holdings into euros. They see taxing such transactions as a way to address a gap in the existing tax framework.
However, the French government opposed the amendment during the debate, raising questions about how stablecoins should be defined and how authorities could monitor transactions across portfolios.
How the Proposed Tax Could Affect Crypto Investors
Stablecoins are widely used by cryptocurrency traders to reduce exposure to market volatility, preserve capital during market downturns and move funds between digital assets.
For example, an investor who purchases Bitcoin and later exchanges it for a qualifying dollar-pegged stablecoin may be able to protect the value of the investment without withdrawing funds into a bank account. Under the proposed rules, that conversion could trigger a taxable gain.
This could change how French investors manage their portfolios, particularly during periods of sharp price movements.
Investors may also need to maintain more detailed records of acquisition costs, disposal values and transaction histories to calculate taxable gains accurately.
The amendment would also change the method used to calculate gains. Instead of relying on the existing portfolio-wide calculation, the proposed framework would use the acquisition cost of the assets disposed of, with a weighted-average method for units of the same cryptocurrency acquired at different prices.
The final impact will depend on the legislation ultimately adopted and how the rules are implemented.
Could the Proposal Push Traders Towards Offshore Platforms?
The proposed tax has raised concerns about its potential effect on trading behaviour and France’s domestic crypto market.
Critics warn that taxing stablecoin conversions could encourage some investors to explore decentralised finance platforms, peer-to-peer transactions or offshore exchanges in search of different transaction structures or tax treatment.
Such a shift could complicate oversight and make it more difficult for authorities to monitor crypto activity. It could also increase compliance burdens for investors and service providers operating within France’s regulated market.
The proposal may create additional uncertainty around stablecoin selection because the amendment specifically targets qualifying electronic money tokens under MiCA. The treatment of any particular stablecoin would depend on its regulatory classification and the final legal text.
At the same time, supporters of tighter tax rules may argue that bringing these transactions within the tax framework would improve consistency between crypto investments and other taxable financial transactions.
What Happens Next?
The amendment’s approval during the National Assembly’s first reading does not guarantee that it will become law. France’s 2027 budget must proceed through the remaining parliamentary stages, including consideration by the Senate, and the provision could still be changed or removed.
Until the legislative process is complete, crypto investors should not treat the proposed January 1, 2027, start date as a confirmed legal requirement.
If the measure becomes law in its current form, France would introduce a significant change to the tax treatment of certain crypto transactions, potentially requiring investors to account for capital gains when moving into qualifying stablecoins rather than waiting until they cash out into euros.
For the European crypto industry, the proposal also highlights a broader policy question: how governments should tax digital-asset transactions while balancing tax compliance, investor protection and the continued development of regulated crypto markets.
Also read: Germany’s Sparkassen Launches Crypto Trading in Banking App at €0.99 Per Order
