French Executives Seek Tax Shift for Crypto-to-Stablecoin Conversions

Three French crypto executives have proposed a new tax framework that would shift the taxable event in cryptocurrency transactions. The proposal, put forth by Jean Meyer of Deblock, Damien Patureaux of Lyzi, and Pierre Morizot of Waltio, suggests taxing conversions from crypto assets into regulated stablecoins rather than when those stablecoins are converted into euros. The goal is to simplify the tax treatment of crypto while maintaining the same tax rate and ensuring gains are taxed only once.

The current French tax system defers taxes on exchanges between digital assets when no additional payment is involved. The executives aim to preserve this tax-deferred treatment for crypto-to-crypto trades and conversions into nonregulated stablecoins like USDT and DAI. Their proposal also calls for calculating gains on an asset-by-asset basis and allowing losses to carry forward, which they argue would make crypto more suitable for payments.

The executives emphasize that the proposal does not introduce a new tax rate but rather addresses the timing of when gains should be taxed. They believe the current system complicates the use of crypto for transactions. The proposal has not been adopted, but it aligns with France's existing legal provisions under the European Union’s DAC8 framework.