France Proposes Stablecoin Tax and 10-Year Loss Relief

France's finance committee has advanced a set of high-profile crypto tax measures that would change how conversions into stablecoins are taxed, allow investors to carry forward crypto trading losses for up to a decade, and introduce a potential exit tax on certain unrealized gains when taxpayers move their residence abroad. These amendments, tabled as part of the draft 2027 budget, are still subject to full parliamentary approval but signal a significant shift in France's approach to crypto taxation and compliance as EU reporting rules come into force.

Key amendments approved in committee

The Finance Committee of the French National Assembly adopted three notable measures during budget deliberations:

Stablecoin conversions become taxable from 2027

• Amendment I-CF1826, submitted by Nicolas Sansu, would treat conversions from cryptocurrencies into qualifying stablecoins or electronic money tokens as taxable disposals as of January 1, 2027. Under current practice, converting one crypto asset to another is often not immediately taxable where deferral provisions apply. The new language would close a perceived loophole allowing investors to convert appreciated tokens into fiat-backed stablecoins without triggering a tax event.
• Gains or losses for covered transactions would be calculated as the difference between the disposal proceeds and the acquisition cost of the asset sold, with documented transaction fees deductible when determining disposal value. For cryptocurrencies purchased prior to January 1, 2027, taxpayers would be offered two methods to determine acquisition cost: use the documented purchase price of each asset or allocate the portfolio's total acquisition cost as of December 31, 2026 across holdings on that date. Choosing the portfolio allocation would require an irrevocable election on the first tax return that reports a taxable disposal after the implementation date.

10-year carryforward for crypto trading losses

• Amendment I-CF798, proposed by Daniel Labaronne, would permit qualifying capital losses from crypto disposals to be carried forward and used to offset eligible gains for up to 10 years. Today, losses from private crypto disposals generally offset gains only in the same tax year, and unused losses typically expire. The proposed rule would give investors a longer horizon to utilize losses when they realize gains in future years.
• The amendment applies to realized losses and does not create direct compensation for unrealized falls in market value. It is designed to align treatment of crypto capital losses more closely with established capital loss regimes for other financial assets.

Potential exit tax on unrealized crypto gains

• The committee also advanced amendment I-CF1822, another proposal from Nicolas Sansu, to extend France's exit tax framework to certain cryptocurrency holdings. The measure targets unrealized gains on qualifying crypto assets exceeding an €800,000 threshold when an eligible taxpayer relocates their tax residence out of France.
• Unlike a normal realization event, this draft would tax gains that remain unrealized at the moment residence criteria and asset conditions are met. The scope and mechanics of any exit tax will depend on final parliamentary language and implementing guidance.

Why the stablecoin change matters

The amendment to tax stablecoin conversions addresses a practical tax-planning route increasingly used by traders and investors. Stablecoins pegged to fiat currencies, such as euro- or dollar-backed tokens, are often treated as digital assets under French rules. However, the ability to convert appreciated crypto into stablecoins without recognizing a capital gain effectively allowed deferral of tax that would have been due if the same assets were sold for traditional fiat currency.

By explicitly treating those conversions as disposals, lawmakers aim to prevent what they consider artificial deferral of taxable events. For investors and exchanges, this raises compliance and reporting consequences: platforms will need to ensure accurate documentation of disposal proceeds and acquisition costs for tax reporting, and taxpayers must carefully choose their method for allocating historical basis if they hold pre-2027 assets.

Acquisition cost options and practical impact

Taxpayers holding crypto purchased before 2027 can either keep individual documented purchase records or opt for a portfolio allocation method based on the portfolio’s acquisition cost as of December 31, 2026. Electing the portfolio method is irrevocable and could materially affect future taxable gain calculations, particularly for long-standing holders whose cost basis varies across positions.

This design attempts to balance administrative practicality with anti-abuse goals, but it will require clear guidance from tax authorities and likely updates to exchange reporting systems to support both accounting methods.

Loss carryforward: a longer safety net for investors

Allowing crypto capital losses to be carried forward for up to 10 years is among the most investor-friendly proposed measures. For market participants who experience large losses in down cycles, the ability to offset future gains can reduce effective tax burdens in recovery years and smooth volatility-driven tax outcomes.

However, the proposed rule covers realized losses only, meaning investors still need to crystallize losses through disposals to benefit. The amendment does not provide relief for unrealized market declines but can materially improve tax outcomes for active traders and long-term holders who periodically rebalance portfolios and capture losses.

DAC8, reporting rules, and enforcement

France’s proposals are unfolding against the backdrop of the European Union's DAC8 reporting framework, which took effect across the bloc on January 1, 2026. Under DAC8, covered crypto service providers must collect and report customer identification and transaction details for many crypto activities, including crypto-to-fiat trades, crypto-to-crypto swaps, and certain transfers involving externally controlled wallets.

The data collected under DAC8 — including customer names, tax IDs, tax residences and transaction histories — will be shared between participating tax authorities according to the information exchange timetable. Information covering the 2026 calendar year is due for exchange in 2027, raising the prospect of more detailed tax audits and enforcement activity as national authorities cross-check filings against provider reports.

Legal challenges and industry concerns

Some crypto firms have challenged France’s national implementing measures for DAC8. In September, the Council of State rejected an emergency suspension sought by Bull Bitcoin and Paymium against France’s decree that enforces the reporting rules. The companies argued centralizing detailed customer data raises security risks for crypto users, but the court denied emergency relief on the grounds that urgency had not been established. Separate legal proceedings remained pending after the emergency application was refused.

Despite legal pushback, France is moving forward with DAC8 implementation. That push coincides with third-party estimates of substantial potentially taxable crypto activity: Chainalysis estimated that France recorded roughly $9.4 billion of potentially taxable digital asset activity across six blockchains in 2025, covering income, realized gains, and payments. Separately, French taxpayers reported about €368 million in cryptocurrency capital gains through roughly 24,000 tax filings for 2024 — a narrower slice of the overall ecosystem but indicative of growing reporting volumes.

What this means for investors and service providers

• Exchanges and wallets operating in France will need to update their reporting, tax-withholding and customer data systems to align with the proposed rules and DAC8 obligations. Accurate tracking of acquisition cost, disposal value and transaction fees will become more critical.
• Investors should review their records for purchases made before January 1, 2027 and consider which acquisition-cost method will be most beneficial. The irrevocable nature of the portfolio allocation election underscores the importance of early planning.
• Tax advisors and accountants must prepare to integrate new calculations for stablecoin disposals, loss carryforwards, and potential exit tax scenarios into client tax strategies.
• Self-custody holders should remain aware that DAC8 reporting obligations are tied to covered service providers. While assets stored in wallets controlled directly by taxpayers may not always trigger foreign custody declarations in some countries, transactions routed through exchanges or other covered providers can generate reportable records.

Broader implications for the crypto market

If enacted, French measures could change trading behavior. Treating stablecoin conversions as disposals may reduce their appeal as a tax-deferral vehicle, pushing more users to either accept taxable events sooner or to explore alternative planning approaches. Meanwhile, the availability of a 10-year carryforward may encourage holders to crystallize losses in strategic ways, knowing they can apply them against gains over a longer horizon.

The potential exit tax adds another layer of planning complexity for high-net-worth individuals and entrepreneurs considering relocation. Clear guidance will be required to determine which holdings count as qualifying crypto assets and how unrealized gains are measured at the residence-change moment.

Next steps in the legislative process

All three amendments remain subject to full parliamentary approval and possible revision before becoming law. The Finance Committee votes signal legislative intent, but final text and effective dates will depend on subsequent debates, potential amendments from other lawmakers, and drafting of implementing regulations.

Investors, exchanges and service providers should follow developments closely, engage with tax advisors, and document purchase records and transaction fees meticulously. As DAC8 exchanges data internationally, the risk of mismatch between taxpayer reporting and provider-submitted records will increase, heightening the importance of robust compliance practices.

Conclusion

France’s finance committee has taken decisive steps toward tightening crypto tax rules by proposing to tax stablecoin conversions, permitting a 10-year loss carryforward, and considering an exit tax on certain unrealized gains. These moves reflect a broader trend of increasing regulatory oversight and enhanced reporting under DAC8 across Europe. While the measures are not yet law, they underscore the need for crypto investors and service providers to prepare for stricter tax treatment and expanded information-sharing in the near term.