A proposal to tax conversions between cryptocurrencies and stablecoins in France has sparked debate in the country's crypto sector. The proposal, put forward by Jean Meyer of Deblock, Damien Patureaux of Lyzi, and Pierre Morizot of Waltio, suggests that taxing these conversions would accelerate the use of cryptocurrencies as a means of payment and simplify tax calculations for users. Currently, conversions between cryptocurrencies and stablecoins are exempt from tax, as long as they do not result in a conversion to euros.
The three executives argue that the current exemption creates a "fiscal singularity" that deprives the state of revenue and hinders the development of a coherent crypto tax system. They believe that taxing conversions between cryptocurrencies and stablecoins would create a more level playing field and encourage the use of cryptocurrencies for everyday transactions. However, not everyone agrees with the proposal, with some warning that it could push users towards unregulated stablecoins.
The Association for the Development of Digital Assets (Adan), a French industry association, has expressed opposition to the proposal. Adan's director general, Claire Balva, argues that taxation should only apply when cryptocurrencies are converted to fiat currency, such as euros or dollars. She warns that taxing conversions to stablecoins could lead to a shift towards unregulated stablecoins, such as USDT, which are less transparent and fall outside the European Union's MiCA regulatory framework.
The debate over crypto taxation comes as France prepares to examine its budget for 2026. The country's crypto sector has gained greater regulatory clarity with the end of the PSAN transitional regime and the implementation of the European Union's MiCA framework. Crypto exchanges are now required to transmit certain information to the tax authorities under the EU's DAC8 directive. The government is seeking to balance the need for revenue with the risk of pushing users towards less regulated solutions.
The proposal to tax stablecoin conversions is not a formal legislative proposal, but rather a tribune published by the three executives. It is unclear whether the proposal will be taken up in the next finance bill, but the issue is likely to be debated in the coming weeks. The French government has been keen to create a more favorable environment for crypto businesses, while also ensuring that the sector is subject to effective regulation and taxation.
Currently, conversions between cryptocurrencies and stablecoins are not subject to tax in France, as long as they do not result in a conversion to fiat currency. Only conversions of cryptocurrencies to euros or other fiat currencies trigger a tax liability, at a flat rate of 31.4%. The three executives behind the proposal argue that their plan would simplify tax compliance for users and create a more level playing field for the crypto sector.
The debate over crypto taxation highlights the challenges of regulating the sector. The French government is seeking to balance the need for revenue with the risk of pushing users towards less regulated solutions. The outcome of the debate is uncertain, but it is clear that the issue of crypto taxation will remain a key topic of discussion in the coming months.
Key points
- French crypto leaders propose tax on conversions between cryptocurrencies and stablecoins.
- The proposal aims to accelerate the use of cryptocurrencies as a means of payment and simplify tax calculations for users.
- The Association for the Development of Digital Assets opposes the proposal, citing concerns about the potential impact on the sector.
