French lawmakers narrowly approved a proposal to tax gains when investors swap cryptocurrency for stablecoins, bringing the transactions a step closer to falling under the country’s 31.4% capital gains levy.

The National Assembly adopted amendment I-3898 to the 2027 budget on Oct. 16 by 38 votes to 37, with 25 abstentions. The vote advances a proposal previously approved by its finance committee.

The proposed changes would apply to transactions from Jan. 1, 2027. They remain subject to the budget’s remaining parliamentary stages and could still be amended or removed before becoming law.

Exchanges between crypto without an additional cash payment generally benefit from tax deferral under current French tax rules. Taxable gains on private investments face a default rate of 31.4%, although investors can opt for the progressive income-tax scale.

The amendment would remove that deferral when investors receive e-money tokens as defined by the European Union’s Markets in Crypto-Assets (MiCA) framework.

Investors could therefore owe tax on gains when moving into qualifying stablecoins, even without withdrawing the funds in fiat currency to a bank account.

The proposal has drawn warnings about its effect on trading. Francois Volpoet, Chainalysis’ regional sales director for France, told CoinDesk last week that it could push investors toward decentralized finance platforms, peer-to-peer transactions and offshore exchanges outside international tax-reporting arrangements.

Public Accounts Minister David Amiel raised questions about implementation and asked for the amendment to be withdrawn, opposing it otherwise.

“We first need to define stablecoins, then ensure our ability to monitor and trace reallocations within a portfolio of assets,” he told lawmakers during the parliamentary debate.

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