France’s National Assembly voted 38-37 on Friday to tax crypto-to-stablecoin swaps by 2027. “It removes that deferral when the investor receives an e-money token, as defined in Article 3 of the Markets in Crypto-Assets Regulation (MiCA). Gains on those swaps would then fall under the 31.4% flat tax France has applied to crypto disposals since January.”
MiCA covers regulatory frameworks that the European Union must adopt over cryptocurrency trading, disclosure, taxation, and so on. Tokens, institutions, and virtual assets that do not abide by nor are covered by MiCA are, by policy, supposed to be de-listed and cease operations. This has posed hurdles to thousands of firms that deal with cryptocurrency, most notably in Poland—where there has been a lack of overseeing bodies for the implementation of MiCA.
Under the MiCA regulations, when an investor receives an e-money token, taxes are deferred. Currently, French tax rules generally permit individuals to exchange one cryptocurrency for another without immediately recognizing a taxable capital gain, provided the transaction falls within deferral provisions. France’s decision reverses this definition. Now, in 2027, swaps would be taxed 31.4%. It covers stable coins pegged to currency, such as the USDC. Nicolas Sansu, a deputy, said: “that converting crypto into Euros triggers the flat tax while converting into a stablecoin does not, and this is a gap in the law.”
According to outlet CryptoPotato, “The new method takes the sale price minus the acquisition cost of the specific assets sold, with a weighted average for units bought at different prices. Holders of pre-2027 coins would choose once, irrevocably, between actual cost per asset and a pro-rata share of portfolio cost on December 31, 2026.”
CryptoAPA posits the opinion: “The new proposal aims to remove this loophole, arguing that existing rules allow investors to convert appreciated cryptocurrencies into fiat-backed stablecoins without triggering the tax that would apply if they sold the same assets directly for traditional currency.”
It is therefore France’s attempt to curb taxation loopholes that investors have exploited; whereby, like other European states, taxation laws are evolving regarding cryptocurrency. This is at a faster rate than that of the U.S., where the Clarity Bill has stalled in the Senate—if anything, this marks proactive legislative spirit within the European Union.
