French Assembly votes 458-0 against budget, erasing crypto tax amendments

France’s National Assembly voted 458-0, with two abstentions, on November 4 to reject the revenue section of the 2027 budget, wiping out amendments that would have taxed crypto-to-stablecoin swaps, required disclosure of self-custodied holdings above €100,000 and raised penalties for platforms that withhold information from tax authorities.

The Senate, which starts examining the bill on November 20, can reinstate any of them.

France’s stablecoin tax and wallet disclosure proposals fall away

One of the most controversial measures removed from the budget concerned the taxation of cryptocurrency conversions into stablecoins.

On October 16, lawmakers approved an amendment that would have treated certain conversions into stablecoins classified as electronic money tokens under the European Union’s Markets in Crypto-Assets (MiCA) framework as taxable transactions from January 2027.

Under the existing French framework, qualifying exchanges between digital assets generally benefit from deferred capital gains taxation when investors do not receive fiat currency or otherwise trigger a taxable disposal.

The proposed change would have significantly altered that treatment. Investors exchanging Bitcoin or other cryptocurrencies for qualifying stablecoins could have faced capital gains liabilities even without transferring their funds into traditional bank accounts.

The amendment narrowly secured approval, receiving 38 votes in favour and 37 against, while 25 lawmakers abstained.

Another significant proposal involved mandatory reporting of privately controlled cryptocurrency wallets.

On November 3, the National Assembly approved an amendment requiring taxpayers to disclose qualifying self-custodied cryptocurrency holdings worth at least €100,000 to French tax authorities.

The proposed threshold would have been calculated using the combined value of eligible assets held on December 31 of the relevant tax year. Non-compliance could have attracted financial penalties of up to €10,000.

Importantly, the reporting requirement was not itself a proposal to introduce an annual tax on the value of those holdings. Instead, it sought to give tax authorities greater visibility into substantial cryptocurrency assets held outside regulated platforms.

A third amendment targeted cryptocurrency service providers, proposing to increase the maximum penalty for failing to supply requested information to authorities from €10,000 to €50,000.

All three measures have now fallen out of the version heading to the Senate following the rejection of the revenue section.

Crypto tax debate raises concerns over France’s competitiveness

The parliamentary developments have intensified discussions about the potential consequences of stricter digital asset regulations for France’s financial technology sector.

Faustine Fleuret, global head of public affairs at decentralised lending protocol Morpho, previously warned that the budget debate could create uncertainty for the cryptocurrency industry.

Speaking to Cointelegraph before the vote, Fleuret explained that rejecting the revenue section could “result in the rejection of the entire bill in the National Assembly, including provisions adopted by way of amendments.”

In a separate LinkedIn commentary, she argued that financial innovation is advancing faster than traditional legal and taxation systems, making it necessary for policymakers to reconsider how existing rules apply to emerging technologies.

Fleuret also highlighted concerns surrounding stablecoin conversion taxation, wallet disclosure obligations and proposed exit taxes, arguing that regulations should preserve self-custody and the technological foundations of decentralised finance.

The debate comes after lawmakers rejected two separate proposals seeking to extend France’s existing exit-tax framework to certain cryptocurrency holdings.

On October 30, an amendment introduced by lawmaker Nicolas Sansu, which sought to bring qualifying unrealised cryptocurrency gains within the country’s exit-tax regime when eligible taxpayers relocated abroad, failed to secure sufficient support. It received 27 votes in favour and 55 against, with one abstention.

A separate proposal from Mickaël Bouloux targeted unrealised gains on household cryptocurrency holdings exceeding €800,000 when qualifying investors transferred their tax residence outside France. Lawmakers also rejected that amendment, voting 60 against and 31 in favour.

These decisions suggest that parliament remains divided over how aggressively France should pursue additional taxation of digital assets.

Nevertheless, the wider crypto tax debate is taking place alongside broader European efforts to strengthen financial transparency and combat tax evasion.

Senate could revive proposals as DAC8 reporting approaches

Although the National Assembly’s decision temporarily removes the disputed amendments, the legislative process is far from over.

The French Senate is scheduled to begin examining the 2027 finance bill on November 20, with discussions on the revenue section expected to start on November 23. Senators could reintroduce some of the discarded proposals, although any changes would still need to survive the remaining parliamentary process before becoming law.

The discussions are particularly significant because France is preparing to implement the European Union’s DAC8 framework, which expands the automatic exchange of information involving cryptocurrency transactions.

Under DAC8, covered cryptocurrency service providers must collect information relating to reportable transactions involving EU residents from January 2026. The first exchanges of information between participating tax authorities are scheduled for 2027.

Unlike the rejected self-custody amendment, DAC8 primarily establishes reporting obligations for qualifying service providers. Its requirements also extend to certain transactions involving self-hosted wallets, including relevant transfers between regulated platforms and privately controlled addresses.

France’s implementation of the framework has already faced legal scrutiny. Bitcoin companies Bull Bitcoin and Paymium challenged aspects of the national implementation, raising concerns about the collection and storage of cryptocurrency users’ information. The Council of State rejected their emergency application in September, although that decision did not resolve their separate challenge to the implementing decree.

Meanwhile, the government faces a December 17 constitutional deadline for completing the 2027 budget process.

Prime Minister Sébastien Lecornu’s administration could also consider invoking Article 49.3 of the French Constitution to advance the budget without a conventional parliamentary vote, although doing so could expose the government to a no-confidence motion.

For cryptocurrency investors and businesses, the latest parliamentary decision offers temporary relief rather than a definitive resolution. The Senate’s examination will determine whether lawmakers attempt to restore the disputed measures or pursue a different approach to digital asset oversight.

France’s broader regulatory direction remains uncertain, with the balance between tax transparency, investor privacy and technological competitiveness likely to remain central to the coming budget negotiations.