French MPs back crypto tax, and stablecoin swaps take the hit

French MPs backed a proposal to tax gains on swaps into certain stablecoins on Oct. 16, while rejecting a separate ten-year crypto-loss carryforward. The paired decisions would bring tax recognition forward for covered swaps without adding relief for net losses from earlier years.

The National Assembly adopted amendment I-3898 by a vote of 38 to 37, with 25 abstentions, during the first reading of the 2027 finance bill. MPs then rejected I-3653 by a vote of 75 to 18, with three abstentions.

The budget remains in first reading, and an Oct. 19 provisional text retains the stablecoin provision in Article 4 octies. Its proposed application from Jan. 1, 2027 depends on enactment.

A tax event before cash-out includes stablecoins

Under the current French rules for private investors, covered crypto-to-crypto exchanges without a cash balancing payment receive tax deferral. That lets a holder change crypto exposure without necessarily recognizing a taxable gain in the exchange year.

I-3898 would remove that deferral when the holder receives MiCA e-money tokens or related rights. The EU's Markets in Crypto-Assets regulation (MiCA) defines e-money tokens as crypto assets seeking stable value by reference to one official currency.

For a holder moving appreciated Bitcoin or Ethereum into a qualifying token to reduce market exposure, a gain could become taxable while the proceeds remain in crypto. The taxable event would be the covered swap, even if no euros reached a bank account.

The calculation would concern the gain above acquisition cost, with documented fees accounted for. Acquisition cost is the amount recognized as the assets' cost for tax purposes. The proposal would replace portfolio-wide cost allocation with a basis for disposed assets, using weighted-average acquisition cost for same-kind assets bought at different prices.

Taxable swaps would reset the received assets' acquisition basis, while deferred swaps would carry basis forward.

For pre-2027 holdings, investors could use documented actual costs or irrevocably allocate existing portfolio acquisition cost across all holdings by their Dec. 31 values.

The separate I-3653 proposal would have allowed unused qualifying crypto losses to carry forward for ten years. Its defeat leaves the existing same-year offsets in place.

Current tax-authority guidance allows crypto losses to offset crypto gains of the same tax year. A net loss cannot carry into subsequent years or offset gains on other asset categories.

If the stablecoin provision survives without another loss reform, earlier-year net crypto losses would remain unavailable against gains recognized on covered swaps. The final budget text will determine whether the tax change takes effect.