There has long been an unwritten rule in the community: converting Bitcoin to USDT, as long as it is not converted back to fiat currency, is still considered "not sold" for tax purposes.
But French legislation has torn a crack in this rule.
By a single vote, the French Parliament has taken action on "stablecoin conversions"
On October 16, the French National Assembly held a roll-call vote during a public first-reading session on an amendment to the 2027 budget bill, with 38 votes in favor, 37 against, and 25 abstentions, passing by a single vote.
Under France's current practice, direct exchanges between crypto assets generally do not trigger capital gains tax; the tax point falls at the moment of final conversion into fiat currency.
This amendment adds a provision: exchanges between crypto assets and "electronic money tokens" (EMTs) are likewise treated as taxable disposals.
EMT is a concept under the EU's MiCA regulation, referring to stablecoins backed by a single fiat currency and redeemable at par at any time, typically such stablecoins as EURC and USDC that have obtained EU compliance status.
Once triggered, capital gains tax is levied at the current default rate of 31.4%.
But the 31.4% applies to the gain, not the full amount exchanged. For example: Bitcoin purchased for EUR 300,000, valued at EUR 500,000 when exchanged for stablecoins, gives a taxable gain of EUR 200,000, and a tax liability of approximately EUR 62,800, not EUR 157,000.
The reason for adding this provision is that legislators believe the current tax treatment has an obvious loophole:
If crypto assets are sold and exchanged for euros or US dollars in cash, the appreciation must be taxed;
But if exchanged for fiat-pegged EMT stablecoins, the gain is economically locked in and detached from coin price fluctuations, yet tax can be deferred;
The economic substance of the two is almost identical; only the asset vehicle differs, yet the tax outcomes are entirely different.
Accordingly, the proposers take the view that this tax disparity arising from the form of the vehicle is unreasonable, and would uniformly treat exchanges between crypto assets and EMTs as taxable disposals.
However, this is only a proposal and not yet law.
The National Assembly passed the amendment at first reading; there remain Senate deliberation, coordination between the two chambers, and constitutional review by the Constitutional Council, and any of these stages could alter or delete the provisions.
The overall vote on the revenue section of the budget bill was originally scheduled for October 20 but has been postponed to around the 27th because more than 2,600 amendments remain to be examined.
Under the current text, it is proposed to apply from January 1, 2027.
Its scope is very narrow, covering only a small category of stablecoins.
The amendment targets only "electronic money tokens" as defined by MiCA, that is, those pegged to a single official currency and redeemable at par, principally USDC and EURC.
Although USDT has not obtained MiCA authorization, this does not directly lead to the conclusion that "USDT is outside the scope":
because the amendment cites the MiCA definition, and that definition looks at how a coin is pegged and whether it is redeemable at par, not at whether the issuer holds a license.
However, whether recognition will be based on the definition or on the list of authorized tokens has yet to be set out in supporting rules in France.
However, the signal sent by the amendment is clear:
Stablecoins are no longer a tax-exempt intermediate stop for fiat currency conversion; regulators are recharacterizing the act of 'swapping into stablecoins.'
The real impact of France's move lies not in the tax rate, but in a step that was previously 'invisible' for tax purposes: going forward, a gain must be calculated and recorded based on the fair value at the time of exchange.
If this proposal ultimately applies, before 2027 you can first self-check four things
1. Are you a French tax resident?
Tax residency status is determined comprehensively based on domicile, number of days of residence, and center of economic interests; it is not necessarily related to where your household registration is or where your wallet is.
2. What type of stablecoins do you hold?
MiCA-compliant EMTs (such as EURC and USDC) and unauthorized varieties (such as USDT) are not the same thing and may affect your tax burden.
3. Where do your coin-swap operations take place?
The locations of exchanges, custodians, and settlement channels may all serve as hooks for determining reporting obligations.
4. Are you clear about the timing and cost basis of each of your 'stablecoin swaps'?
The amendment also changes how cost is calculated:
Currently it is calculated on a whole-portfolio basis; after the change it will be calculated on a per-transaction basis, and where the same coin has been purchased several times, a weighted average will be used.
Historical cost records directly determine your tax basis.
The industry's default assumption that "as long as you don't cash out, it doesn't count as a sale" is being rewritten.
