France Approves 1% Wealth Tax on Large Crypto Holdings
The French National Assembly has approved a controversial amendment classifying cryptocurrency holdings above €2 million as “unproductive wealth,” subjecting them to a 1 percent annual tax. The measure marks one of the boldest regulatory steps toward taxing digital assets in the European Union.
Background of the decision
The amendment was introduced by lawmaker Jean-Paul Mathieu and gained cross-party support after months of debate on how to integrate crypto assets into France’s broader fiscal policy.
According to the proposal, individuals and entities holding more than €2 million in cryptocurrencies will be required to declare these assets as part of their taxable net wealth starting January 1, 2026. The measure forms part of a broader push to align digital assets with traditional categories of capital and luxury wealth.
Government’s rationale
Supporters of the bill argue that high-value crypto portfolios contribute little to the “productive economy,” calling them speculative instruments rather than job-creating assets. “We are not penalizing innovation,” Mathieu stated, “but ensuring that digital wealth participates in national solidarity just like any other form of capital.”
The 1 percent rate is framed as moderate compared to traditional wealth-tax levels, yet critics view it as a potential deterrent to France’s growing fintech ecosystem.
Backlash from the crypto community
The decision has sparked backlash among entrepreneurs and retail investors, who warn it could trigger a mass sell-off of crypto assets or drive capital out of France to more crypto-friendly jurisdictions such as Portugal, Switzerland, and the UAE.
Crypto advocacy groups argue that labeling digital assets as “unproductive” ignores their role in decentralized finance, tokenized infrastructure, and the development of blockchain startups. “Taxing innovation as if it were idle gold undermines competitiveness,” said one industry representative.
Potential market effects
Analysts expect short-term volatility in local exchanges as high-net-worth investors adjust portfolios before the law takes effect. Some predict an increase in offshore migration of French crypto funds, while others see an opportunity for regulatory clarity to attract institutional investors seeking predictable tax regimes.
The measure may also influence ongoing EU discussions around harmonized crypto taxation frameworks, potentially serving as a model—or a cautionary tale—for other member states.
Outlook
The legislation still requires approval from France’s upper chamber, the Senate, but is widely expected to pass given bipartisan backing. If enacted, the law would position France at the forefront of fiscal regulation of digital wealth—an ambitious move that could reshape Europe’s relationship with cryptocurrencies in 2026 and beyond.
Editorial Team — CoinBotLab