Key Developments
A recent amendment adopted by the French National Assembly proposes to classify cryptocurrencies such as Bitcoin and Ethereum as "unproductive wealth," similar to yachts and hoarded gold. This move could significantly alter the tax landscape for French investors holding digital assets.
In brief
- •The National Assembly has passed an amendment classifying cryptocurrencies as taxable “unproductive wealth.”
- •Only crypto holdings exceeding €2 million would be subject to a flat 1% tax.
- •The measure still needs Senate approval before taking effect in early 2026.
- •France’s crypto industry warns the move sends a politically hostile signal toward digital innovation.
A Fiscal Turning Point Targeting "Dormant" Wealth
The National Assembly passed a symbolic milestone last Friday by adopting an amendment that redefines the taxation of wealth in France. By 163 votes to 150, deputies approved the measure, which aims to address what is considered an “economic inconsistency”: the tax exemption enjoyed by certain assets deemed “unproductive.”
Cryptocurrencies will now join a list that includes gold, yachts, collector cars, and works of art. The political message behind this classification is that these assets, which do not directly contribute to the “dynamism of the French economy,” should be discouraged by taxation.
The amendment proposes a single rate of 1% on unproductive wealth exceeding 2 million euros. This contrasts with the progressive system currently in place for real estate. For crypto holders, this measure represents a radical change, as until now, only capital gains realized from the sale of digital assets were taxed.
Under the proposed law, simply holding a large portfolio could generate an annual tax bill. For example, an investor holding 3 million euros in bitcoin would have to pay 10,000 euros each year, even without making any gains.
The vote saw an eclectic coalition, with Socialists and far-right deputies uniting to pass the text, illustrating a cross-party mistrust of digital assets. However, the measure still requires Senate approval before it can be included in the 2026 budget.
The Crypto Ecosystem Protests Against an "Ideological Error"
Éric Larchevêque, the co-founder of Ledger, a prominent French crypto wallet company, has strongly denounced the measure. He stated on social media that it “punishes all savers who want to anchor their financial assets in gold and Bitcoin.”
This amendment, presented by Jean-Paul Matteï, aims to tax crypto assets as "unproductive wealth," similar to yachts and hoarded gold. It proposes a 1% tax on holdings above €2 million. The crypto industry fears this sends a hostile signal to digital innovation.
Larchevêque views the political signal as disastrous, accusing the legislator of wanting to “penalize holding value outside the fiat monetary system.”
The industry's concerns extend beyond the initial signal. Firstly, there is a significant risk of forced liquidations. Many French investors hold the majority of their wealth in cryptocurrencies and may lack the immediate liquidity to pay an annual tax. This could force them to sell assets under unfavorable conditions, leading to downward pressure on their portfolios.
Furthermore, there is a feared domino effect. While the current threshold is set at 2 million euros, there is no guarantee that the state will not lower it in the future. This uncertainty adds to the apprehension within the crypto community.
The timing of this initiative is particularly noteworthy. While countries like the United States are actively pursuing pro-crypto initiatives, with some states even considering Bitcoin as a strategic reserve, France appears to be taking a contradictory path. This development is especially striking given that it comes just days after a proposal from the UDR mentioned the creation of a national reserve of 420,000 bitcoins.
The technical challenges associated with implementing this law are also a major concern. Questions remain unanswered regarding how to accurately assess crypto wallets held on decentralized platforms or stored offline in hardware wallets. Additionally, verifying the accuracy of declarations without establishing an overly large administration poses a significant hurdle, potentially hindering the practical implementation of this law.