France Passes Controversial Wealth Tax Targeting Cryptocurrency Holdings

France’s National Assembly has narrowly approved a contentious amendment to the 2026 Finance Bill that, for the first time, explicitly includes cryptocurrencies in the country’s wealth tax base. The measure has drawn sharp criticism from industry leaders, who warn it could discourage innovation and accelerate the departure of crypto talent from France.

Passed last Friday by a vote of 163 to 150, Amendment No. I-3379 adds digital assets—defined under Article L.54-10-1 of the Monetary and Financial Code—to a new category of “unproductive wealth,” alongside gold, yachts, and classic cars. The rule imposes a 1% annual tax on net wealth exceeding $2.2 million (€2 million), up from the previous threshold of $1.49 million (€1.3 million).

The amendment, introduced by centrist MP Jean-Paul Mattei of the Les Démocrates group, aims to encourage “productive” investment by granting exemptions for certain long-term rental properties. However, cryptocurrencies receive no such exemptions.

Lack of Clarity Fuels Concern Among Crypto Founders

Critics argue the law’s vague wording fails to distinguish between categories of crypto holders or account for tokens earned through legitimate business activities such as project vesting, team allocations, or network incentive programs.

Joe David, CEO and Founder of digital asset advisory firm Nephos, told Decrypt that the bill “risks oversimplifying” the crypto landscape by not differentiating passive investors from builders whose tokens represent “years of contribution, innovation, and risk taking.”

He warned the measure could “inadvertently penalize productive capital” that drives technological progress in France’s digital economy and fails to align with “global standards” on crypto taxation.

From Transaction Tax to Wealth Levy

If enacted, the amendment would fundamentally alter France’s approach to crypto taxation—replacing the current 30% tax on realized gains with an annual levy on holdings, applied “whether or not they’re sold.” Legal experts caution that this shift could create significant uncertainty for token-based business models.

Burçak Ünsal, Managing Partner at ÜNSAL Attorneys at Law, noted that the law fails to exclude token issuers and founders who hold crypto as part of their operational responsibilities. He described taxing these holdings as “economically unjust,” arguing that it creates an “unintended disincentive” for long-term alignment between founders and their projects.

Ünsal added that without implementing decrees to clearly define who qualifies as a professional versus an occasional trader, “tax-structuring risk” will persist across the sector. For now, such distinctions would be determined “case by case,” based on trading volume, frequency, and the proportion of income derived from crypto.

Experts Warn of Capital Flight and Policy Missteps

Global tax experts have echoed these concerns, arguing that France’s new wealth tax could push entrepreneurs and investors abroad. Austin Yuanlun Yin, U.S.-licensed CPA and President of the Global Council on Crypto Taxation, said the reform “risks punishing innovation” and could accelerate capital flight given the borderless nature of digital assets.

“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. That’s inaccurate and shortsighted,” Yin said.

He urged policymakers to recognize cryptocurrencies as vehicles for funding startups, decentralized infrastructure, and digital innovation rather than treating them as static stores of value.