France's Proposed Crypto Tax is "Economically Unjust": Experts

France's National Assembly has adopted a controversial wealth tax amendment that explicitly targets cryptocurrency holdings for the first time. The measure has triggered criticism from industry experts, who warn it could penalize innovation and drive talent abroad. Passed by a narrow 163-150 vote last Friday, Amendment No. I-3379 to France's 2026 Finance Bill adds digital assets to the tax base described as "unproductive wealth," alongside gold, yachts, and classic cars.

Introduced by centrist MP Jean-Paul Mattei of the Les Démocrates group, the amendment imposes a flat 1% annual tax on net wealth exceeding $2.2 million (€2 million), up from the previous threshold of $1.49 million (€1.3 million). While the bill aims to foster productive investments by exempting certain long-term rental properties, cryptocurrency holdings do not receive similar exemptions. It also does not differentiate between various categories of crypto holders, failing to exempt tokens earned through business activity, team vesting, or network incentive programs.

Industry experts argue that the lack of nuanced definitions complicates the taxation of cryptocurrency holders. Joe David, CEO and Founder at Nephos, stated that the bill "risks oversimplifying" the crypto landscape by failing to distinguish between passive investors and ecosystem builders, whose tokens represent "years of contribution, innovation, and risk taking." He warned that the amendment could inadvertently penalize productive capital that drives technological progress and is out of alignment with global standards on crypto taxation.

Burçak Ünsal, Managing Partner at ÜNSAL Attorneys at Law, emphasized that the amendment fails to exempt token issuers and founders who hold assets due to their operational roles. Taxing early token-holders, who contribute to ecosystem-building, could be deemed "economically unjust," creating an "unintended disincentive" for long-term alignment. Ünsal also noted that without clear definitions to distinguish professional traders from occasional traders, there remains significant "tax-structuring risk" for token-based businesses, which would be assessed case by case based on "volume, frequency, and the proportion of crypto income."

Austin Yuanlun Yin, US-licensed CPA and President of the Global Council on Crypto Taxation, warned that heavy taxation on crypto "risks punishing innovation" and could accelerate capital flight, as digital assets can easily move across borders within minutes. Highlighting the problem, Yin stated, "By lumping digital assets like Bitcoin with yachts and art under a 'tax on unproductive wealth,' France is sending a message that crypto capital is idle rather than dynamic." He further urged policymakers to recognize the role of crypto in funding startups, decentralized infrastructure, and digital innovation.

The proposed bill now heads to the Senate for review, followed by a second reading in the National Assembly. Lawmakers have 70 days to complete deliberations, with final adoption required by December 31, 2025. The outcome will likely determine the future of cryptocurrency taxation and its broader implications for France's digital economy.