France Imposes Tax on Large Crypto Holdings as 'Unproductive Wealth'

France has voted to advance a new tax law that categorizes large cryptocurrency holdings as "unproductive wealth," targeting individuals with total net assets exceeding €2 million at a flat tax rate of 1%. The amendment, filed by Centrist MP Jean-Paul Matteï, was passed by the National Assembly with a vote of 163-150 and must now proceed through the Senate before potentially taking effect by January 1, 2026.

This law expands the existing real estate wealth tax to include digital assets, along with other items like yachts, luxury cars, and unused properties. It applies even to unrealized gains, requiring residents to report all assets, including foreign wallets and exchanges, on a government-set reference date. The threshold has been raised from the previous €1.3 million, and the tax is designed to encourage productive investment in the economy.

Supporters argue that the measure makes taxation fairer and closes loopholes used by wealthy citizens to avoid levies. However, critics, including Éric Larchevêque, co-founder of Ledger, have expressed concerns that it punishes savers and could compel investors to sell assets to pay the tax, potentially discouraging innovation and driving capital out of France.