What happened?
France’s National Assembly narrowly approved an amendment to relabel its real-estate wealth tax as an “unproductive wealth” tax and explicitly include digital assets like Bitcoin and other cryptocurrencies. The change would raise the exemption threshold to €2 million and apply a flat 1% rate on net assets above that level, and it could, in practice, lead to annual taxes on unrealized crypto gains. The amendment still needs Senate approval and further parliamentary steps before it becomes law.
Who does this affect?
The proposal mainly targets wealthy households and investors who hold significant crypto, luxury goods, art, yachts, or private jets that lawmakers now consider “unproductive.” It also affects crypto exchanges, tax advisors, and anyone involved in valuing or reporting digital assets because annual valuation and compliance would become more complex. Critics say illiquid or volatile crypto holders could be forced to sell parts of their portfolios just to cover new tax bills, hitting ordinary savers as well as speculators.
Why does this matter?
For markets, treating crypto as “unproductive wealth” risks creating selling pressure if holders liquidate to pay annual taxes or shift assets offshore, which would likely hurt crypto prices and liquidity. It could also redirect capital toward assets deemed “productive,” raise compliance costs, and increase valuation uncertainty that discourages long-term crypto investment and innovation in France. If other countries follow suit, the move could set a precedent for taxing unrealized gains and materially reshape global crypto market dynamics.