France's National Assembly passed Amendment I-3898 on October 16, 2026, by a single vote — 38 to 37, with 25 abstentions — imposing a 31.4% capital gains tax on crypto-to-stablecoin conversions effective January 1, 2027. The measure targets swaps into MiCA-regulated electronic money tokens (EMTs)...
"Do we want more taxpayers to declare their assets, or a higher tax rate applied to a base that is increasingly evaded?" — Francois Volpoet, Chainalysis CEO France
France's National Assembly passed Amendment I-3898 on October 16, 2026, by a single vote — 38 to 37, with 25 abstentions — imposing a 31.4% capital gains tax on crypto-to-stablecoin conversions effective January 1, 2027. The measure targets swaps into MiCA-regulated electronic money tokens (EMTs) such as USDC and EURC, reclassifying them from tax-deferred crypto-to-crypto transactions to taxable disposal events. USDT, DAI, and PAXG — which lack MiCA authorization — are not covered.
The amendment lands in a European stablecoin market worth approximately $930 million in euro-denominated supply alone, where five major EU economies now apply five materially different tax treatments to the same asset class. Germany taxes stablecoin gains at up to 45% within a one-year holding period but at 0% thereafter. Italy taxes crypto at 33% but carves out euro-pegged stablecoins at 26%. France proposes a flat 31.4%. Portugal exempts gains on assets held over 365 days. The Netherlands taxes a deemed return on crypto wealth at 36%, regardless of actual gains. This fragmentation creates measurable arbitrage incentives across the single market.
The French proposal modifies the existing flat tax regime — the prélèvement forfaitaire unique (PFU) — which combines 12.8% income tax and 18.6% social contributions into a 31.4% rate. Under current rules, swapping one crypto asset for another does not trigger a taxable event; only conversion to fiat currency (euros) does. Amendment I-3898 reclassifies conversions into MiCA-regulated EMTs as taxable disposals.
The practical impact: a French investor who bought €10,000 in Bitcoin with a cost basis of €6,000 and swaps it into USDC would owe €1,256 in tax (€4,000 gain × 31.4%), despite never converting to euros or receiving money in a bank account.
The amendment applies exclusively to stablecoins issued by entities holding MiCA EMT licenses. Circle's USDC and EURC are covered. Tether's USDT — which Tether has publicly stated it will not seek MiCA authorization for, and which was delisted by major European exchanges for EEA retail users — is not. This creates a regulatory asymmetry where compliance with EU law increases tax liability.
Only 100 of France's 577 National Assembly members voted. The 38-37 margin, with 25 abstentions, means fewer than 7% of legislators determined the outcome.
The same €100,000 stablecoin gain produces five different tax outcomes across five EU member states:
| Country | Rate on Stablecoin Gain | Holding Period Exemption | Special Stablecoin Treatment | Tax on €100K Gain | |---------|------------------------|-------------------------|-----------------------------|--------------------| | France (proposed) | 31.4% flat | None | MiCA EMTs taxed as fiat exits | €31,400 | | Germany | 0–45% progressive | 0% after 1 year | Treated as crypto; holding rule applies | €0 (if held >1yr) or up to €45,000 | | Italy | 33% (general crypto) | None | Euro-pegged stablecoins taxed at 26% | €26,000 (euro-pegged) or €33,000 | | Portugal | 28% flat | 0% after 365 days | No special carve-out | €0 (if held >365 days) or €28,000 | | Netherlands | ~36% on deemed return | None | Taxed under Box 3 wealth assumption | ~€12,600* |
*Netherlands figure assumes a deemed return of approximately 6.04% on a €500K portfolio with €100K in embedded gains; actual tax varies by portfolio value and assumed return brackets.
Germany's federal cabinet was expected to abolish the one-year holding exemption on October 14, 2026. It did not. The exemption remains in force, according to CoinTracking's tracking of the legislative status. For German private investors, stablecoin gains held over one year remain entirely tax-free regardless of amount.
Italy's approach is notable for the opposite reason: the 2026 budget set a general crypto capital gains rate of 33%, up from 26% in 2025, but specifically maintained the 26% rate for euro-denominated e-money tokens. Rome treats euro-pegged stablecoins as closer to fiat than to speculative crypto — the inverse of Paris's logic.
France's amendment creates a measurable penalty for using MiCA-compliant stablecoins. USDC and EURC, which hold MiCA EMT authorization, are taxed. USDT, which does not have and is not pursuing MiCA authorization, is exempt.
This inverts the regulatory incentive structure. MiCA was designed to bring stablecoin issuers under prudential supervision — reserve requirements, audit obligations, redemption guarantees. Issuers that invested in compliance (Circle obtained its EMI license in France through its subsidiary) now see their products disadvantaged relative to non-compliant alternatives.
The market data illustrates the scale: Circle's EURC holds 62.6% of the euro stablecoin market, with a market cap of approximately $526 million as of September 2026, according to CoinDesk research. Société Générale's EURCV holds 19.6%, or roughly $171 million. Together, MiCA-compliant issuers account for 82% of the euro stablecoin segment. The amendment, if enacted, would apply the tax surcharge to the dominant products while exempting the fringe.
Euro-denominated stablecoin supply reached approximately $930 million by late September 2026, according to CoinDesk's stablecoin research. This represents a 22.6% year-to-date increase, or a net addition of approximately $156 million in 2026. Monthly transaction volume for euro stablecoins rose nearly ninefold post-MiCA to $3.83 billion, according to the Digital Euro Association.
However, the euro segment remains negligible against the dollar: USD-denominated stablecoins have a combined market cap of approximately $298.5 billion — roughly 350 times larger. USDC alone stands at $75.3 billion.
The broader DeFi lending market, a primary destination for stablecoin deployments, reached approximately $56 billion in TVL by mid-October 2026, up 55% from its July 2026 low. Total DeFi TVL stood at $90.05 billion, down 1.18% week-over-week.
CEX trading volume for euro-denominated stablecoins reached $745 million for the period ending August 26, 2026, up 12.3% from the comparable July period. But euro stablecoin spot volumes have declined roughly 50% since early 2024, dropping from nearly $200 million per month to around $100 million on DEX platforms, according to data cited by BEX.
A tax that penalizes conversion into the fastest-growing regulated segment of the European stablecoin market risks reversing the post-MiCA supply growth that regulators sought to encourage.
Chainalysis CEO for France Francois Volpoet warned in an email to CoinDesk that the 31.4% tax could push traders toward "DeFi platforms, peer-to-peer trading and exchanges outside international tax-reporting arrangements." Volpoet argued that authorities can more easily monitor regulated stablecoin transactions on centralized exchanges than trades made through decentralized protocols or self-hosted wallets.
The concern has a structural basis. MiCA-compliant exchanges operating in the EU must comply with reporting requirements under the OECD's Crypto-Asset Reporting Framework (CARF). Offshore platforms and DeFi protocols do not. A tax that makes regulated stablecoins more expensive than unregulated alternatives incentivizes migration to less transparent venues.
The precedent exists: when India imposed a 30% flat tax on crypto gains plus a 1% TDS (tax deducted at source) in 2022, on-chain data from Chainalysis showed measurable volume migration to offshore exchanges. France's proposal applies a comparable rate (31.4%) to a narrower category of transactions.
Alongside the stablecoin tax, the Finance Committee adopted Amendment I-CF1822 on October 8, 2026, extending France's existing exit tax to crypto portfolios exceeding €800,000. The provision would apply to departing taxpayers who held French tax residence for at least six years during the preceding decade.
The combination creates a two-sided squeeze: stablecoin conversions are taxed at 31.4% domestically, while emigration with significant holdings triggers an exit levy. The policy logic — reducing both offshore migration and capital flight — acknowledges the mobility of crypto wealth while attempting to tax it in both directions.
However, the exit tax threshold of €800,000 applies to gross portfolio value, not gains, according to the amendment text reported by Crypto Briefing. For a French crypto investor with a €1 million portfolio, both remaining (stablecoin swap tax) and leaving (exit tax) carry tax consequences that do not exist across the border in Germany or Portugal.
The stablecoin amendment's path to law is not assured. The National Assembly's finance committee initially adopted the predecessor amendment (I-CF1826) on October 7, 2026, but the budget's revenue section was rejected on October 9. The amendments were reintroduced during floor debates starting October 13, culminating in the 38-37 full Assembly vote on October 16.
The amendment now proceeds to the French Senate for review. Senate approval is required before the measure can be enacted. Even if the Senate approves, the Constitutional Council (Conseil constitutionnel) could review the provision. A final vote on the full 2027 budget is scheduled for late October.
The Senate's historical posture on crypto taxation has been more moderate than the Assembly's. The outcome remains uncertain.
France's stablecoin tax amendment exposes a structural gap in European crypto policy. MiCA created a unified regulatory framework for stablecoin issuance, but taxation remains a national prerogative. The result: five EU member states apply five different rates and rules to the same stablecoin transaction. A French investor converting Bitcoin to USDC faces a 31.4% levy. A German investor making the identical swap pays nothing if held over a year.
The amendment's most counterintuitive effect is punishing MiCA compliance. Issuers that invested in European licenses now see their products carry a higher tax cost than non-compliant alternatives. For a regulatory framework designed to bring order to stablecoin markets, this outcome is the opposite of the stated objective.
The single-vote margin, low turnout, and pending Senate review all suggest the measure's final form — or survival — is uncertain. What is certain is that Europe's stablecoin tax map, already fragmented, is becoming more complex. Cross-border arbitrage incentives are increasing at the same time euro-denominated stablecoin supply is reaching record levels. The gap between regulatory ambition and fiscal coordination remains wide.