French Senator Sylvie Vermeillet recently proposed a controversial bill that would classify Bitcoin and other digital assets as “unproductive,” subjecting them to taxes akin to luxury items and vacant properties. Under this proposal, cryptocurrencies would be considered unproductive assets for the 2025 budget, with taxes imposed on unrealized gains exceeding €800,000.
The potential implications of taxing Bitcoin on unrealized gains have sparked concern among industry experts. Alice Stork, founder of Paris-based Web3 public relations agency ICL, expressed apprehension over the proposal, stating that it fails to account for the volatility of crypto markets. Stork raised the question of what would happen if the value of one’s holdings were to plummet after taxes had already been paid on gains that were never realized. She warned that such measures could drive innovators and businesses away from France.
Despite opposition from industry professionals, the bill has already passed the Senate in a preliminary vote and received backing from Finance Minister Laurent Saint-Martin. The Finance Minister defended the proposed changes, arguing that they would create a more balanced tax system for Bitcoin gains.
If the bill is enacted, French cryptocurrency holders would be required to report their foreign cryptocurrency holdings annually using the Cerfa 3916-bis form. Failure to comply could result in fines ranging from €750 to €1,500. Sébastien Martin, CEO and co-founder of French crypto risk management firm RAID Square, highlighted Vermeillet’s influence as Vice President of the Sénat and a member of France’s oldest political party, Parti Radical.
France’s move to tax Bitcoin HODLers is part of a broader trend of crypto regulation in the country. In November, France’s National Gaming Authority announced plans to block Polymarket, a blockchain-based prediction market platform. Additionally, Bitcoin exchange ByBit exited the French market due to regulatory developments following the implementation of Europe’s MiCA crypto legislation.
The country’s regulatory actions have drawn criticism from privacy advocates, particularly following the arrest of Telegram founder Pavel Durov on charges related to alleged criminal activities on the Telegram app. While critics have raised concerns about political motivations behind the arrest, French President Emmanuel Macron has denied these claims.
As France continues to navigate the complexities of regulating the crypto industry, stakeholders remain vigilant about the potential impact on innovation and economic growth in the country.
This article was edited by Stacy Elliott.