Key Takeaways
- A French committee backed a proposal to tax crypto-to-stablecoin swaps, closing a tax deferral loophole.
- The amendment removes a crucial tax flexibility lever, preventing investors from parking untaxed crypto gains.
- The proposed rule faces a plenary vote on October 13, sparking strong backlash from local crypto leaders.
Stablecoin Swap Tax Proposal Passed in France By French National Assembly Committee
French lawmakers are taking a strong approach to recover what they believe are losses from using stablecoins, tokens pegged to the value of a fiat currency, as money.
The French National Assembly Finance Committee recently backed and adopted Amendment I-CF1826, which introduces capital gains tax responsibilities for every swap transaction from any cryptocurrency to stablecoins.
The proposal, introduced by MP Nicolas Sansu, explains that its purpose is to address “the tax deferral enjoyed, without valid reason, by conversions of cryptoassets to stablecoins.”
Under current regulation, only crypto-to-fiat transactions are taxed as capital gains. Nonetheless, Sansu stresses that, by taking advantage of a regulatory loophole, capital gains from exchanging crypto for fiat-pegged stablecoins are exempt from this tax.
The amendment states that stablecoins have become classic investment vehicles, used to pay for goods and services with payment providers and leveraged to purchase other cryptocurrencies, facilitating investment opportunities.
“By ultimately escaping the flat tax, we deprive ourselves of a valuable tax resource that does not create any new burden: it is a simple application of the already existing tax law to a case that had not been taken into account.” Sansu assessed, mentioning that Italy and the UK have also legislated in this direction, treating stablecoins as currency.
The amendment, which must face a plenary vote before becoming law and would become effective in January 2027, follows a similar proposal from three French crypto executives and has sparked rejection among the French cryptocurrency community.
Owen Simonin, founder and CEO of Meria, a crypto investment platform, stressed that this change would remove one of the last real levers of tax flexibility left to French crypto investors, allowing them to park their earnings without immediately triggering taxation events.
“Stablecoins were the rest stop when an investor stepped out of the highly volatile crypto market before jumping back in later. Now that rest stop comes with a fee?” Simonin concluded.
This and other controversial amendments, such as declaring crypto funds over 100,000 euros held in self-custody wallets, will face scrutiny on October 13, when the general hemicicle will meet to consider these changes.
