France Moves to Tax Stablecoin Swaps

The French National Assembly has approved an amendment that changes how digital assets are taxed in the country. The text establishes that exchanges between cryptocurrencies and stablecoins may become taxable events. The measure passed by a narrow margin during Friday's session.

If the legislation takes effect in 2027, investors will be required to pay capital gains taxes at the moment of conversion. The tax calculation will use the original asset's acquisition cost and the weighted average purchase price. This removes the need to convert gains into fiat currency for the tax obligation to be triggered.

French lawmakers are also discussing other proposals related to the digital asset sector. One of the items under review involves extending the exit tax to portfolios exceeding 800,000 euros. This rule would affect taxpayers who move their tax residence abroad while holding unrealized gains.

Furthermore, parliament is evaluating reporting requirements for self-custody wallets. Conversely, the French government rejected a proposal that would have allowed for the deduction of losses realized in crypto operations over a ten-year period.

The intensification of fiscal regulation in Europe increases regulatory risk for digital asset holders and may pressure stablecoin liquidity by making portfolio rebalancing more expensive.