The measure passed by a narrow margin and could force wealthy crypto holders to pay annual taxes on their investments—even if they haven’t sold anything.

The Vote That Shocked the Crypto Community

On October 31, 2025, France’s National Assembly voted 163-150 to advance an amendment that would reshape how the country taxes cryptocurrency. Centrist Member of Parliament Jean-Paul Matteï filed the proposal on October 22, gaining unexpected support from socialists and far-right politicians.

The amendment isn’t law yet. It still needs approval from France’s Senate as part of the 2026 budget negotiations. But industry experts say chances are strong that it will pass, potentially taking effect on January 1, 2026.

How the Tax Would Work

Under the proposed system, French residents with more than €2 million ($2.3 million) in “unproductive assets” would pay a flat 1% tax annually. The government considers cryptocurrency unproductive because, unlike businesses or productive investments, it doesn’t directly create jobs or contribute to economic activity.

The tax applies to the total value of these assets, including any unrealized gains—profits that exist on paper but haven’t been cashed out yet. This means someone holding Bitcoin worth €3 million would owe €10,000 in taxes each year (1% of €1 million over the threshold), regardless of whether they sold any crypto.

Besides digital currencies, the tax targets luxury goods like classic cars, gold, artwork, private planes, and vacation properties. The French government argues these items don’t help grow the economy the way productive investments do.

Currently, France’s real estate wealth tax uses a progressive system, starting at €800,000 with rates climbing to 1.5% for assets over €10 million. The new proposal simplifies this to a single 1% rate but raises the threshold to €2 million while expanding what gets taxed.

Strong Opposition from Crypto Leaders

Éric Larchevêque, who co-founded the crypto wallet company Ledger, criticized the amendment sharply. He said it “punishes all savers who wish to financially anchor themselves to gold and Bitcoin in order to protect their future.”

Source: @EricLarch

Larchevêque called the measure “a major ideological error” and warned that the government is “punishing the holding of value outside the fiat monetary system.” He’s particularly worried the €2 million threshold could drop over time, affecting more investors.

Another concern: many crypto holders might need to sell their digital assets just to pay the tax bill, especially if their wealth is tied up in cryptocurrency and they lack other liquid funds. Financial analysts estimate up to 50,000 French residents could be affected.

France’s Contradictory Crypto Strategy

What makes this situation especially confusing is that France is pursuing two opposite approaches to cryptocurrency at the same time.

While lawmakers voted to tax crypto as unproductive, a different group introduced a bill to create a national Bitcoin reserve of 420,000 BTC ($106,759.00)—roughly 2% of Bitcoin’s total supply. The reserve proposal, from the right-wing Union des droites pour la République party, would use state-funded mining and seized crypto to build this stockpile over seven to eight years.

The reserve bill even suggests letting citizens pay certain taxes in Bitcoin and creating exemptions for euro-stablecoin payments up to €200 daily. This treats Bitcoin as a strategic national asset, like gold reserves.

These contradictory proposals show France is deeply divided on cryptocurrency’s role. One approach treats it as idle luxury to be taxed. The other views it as important for monetary sovereignty.

Tougher Enforcement Already Underway

France isn’t waiting for new laws to crack down on crypto. The country’s banking regulator has been conducting extensive anti-money laundering checks on Binance and dozens of other cryptocurrency exchanges. French authorities have also pushed for centralized EU oversight of crypto platforms.

Only four out of over 100 registered crypto service providers in France have received full authorization so far—an approval rate of roughly 4%. Companies face a June 2026 deadline to meet all requirements or lose access to the entire European Union market.

The Road Ahead

The wealth tax amendment now heads to France’s Senate for debate. Lawmakers there might refine the definition of “digital assets” or create exceptions for crypto used in productive ways, like staking or business operations.

If both the tax and Bitcoin reserve proposals advance, France would have a puzzling system: treating private crypto holdings as taxable luxury while elevating state-held Bitcoin to sovereign wealth status.

Other European countries like Switzerland, Spain, and Norway already tax crypto wealth annually, so France wouldn’t be breaking entirely new ground. However, the combination of taxing unrealized gains and potentially building a government Bitcoin reserve creates a unique and controversial approach.

Industry groups warn that heavy taxation without supportive regulations could push crypto businesses and investors to leave France for more welcoming countries. This would cost France tax revenue and innovation in an industry that’s growing rapidly worldwide.

A High-Stakes Gamble

France is making a bold bet with this “unproductive wealth” tax. The government wants to generate revenue and push investors toward traditional productive assets. But it risks driving away a thriving crypto industry and sending a message that France isn’t friendly to digital innovation.

Whether this approach succeeds or becomes a cautionary tale for other nations will depend on how lawmakers refine the proposal and whether they can balance revenue needs with maintaining an attractive environment for emerging technologies. For now, French crypto holders are watching nervously as their investments hang in the political balance.