• Critics warn of liquidity issues and stifled innovation, while advocates argue it aligns crypto with traditional assets.
• Could France’s Bitcoin policy set a global precedent?

The French Senate recently proposed a groundbreaking policy to tax unrealized gains from Bitcoin and other cryptocurrencies.

Labeling such holdings as “unproductive wealth,” the proposed legislation aims to align cryptocurrency taxation with traditional financial assets like real estate or stock holdings. However, this move has sparked debate within the crypto community and the broader financial world.

What the proposal entails

Under the Senate’s proposal, cryptocurrency holders would be required to pay taxes on the increase in their digital assets’ value, even if they haven’t sold them. The policy specifically targets “unrealized gains,” a concept long debated in traditional financial systems.

French Senator Éric Bocquet, a key advocate of the policy, stated, “Cryptocurrencies have grown from speculative tools to significant financial instruments. This tax will ensure their contributions to the broader economy are equitable.”

Critics argue that this new tax could disincentivize crypto investment in France, potentially driving businesses and individual investors ...