France Proposes Taxing Bitcoin HODLers on ‘Idle Assets’

French Senator Sylvie Vermeillet recently suggested categorizing Bitcoin and other digital assets as “unproductive,” proposing that they should be taxed similar to luxury goods and vacant properties.

The bill being discussed considers cryptocurrencies as unproductive assets in the 2025 budget, leading to potential taxes on unrealized gains exceeding €800,000.

Alice Stork, founder of the Paris-based Web3 public relations agency ICL, expressed concerns to Decrypt about a potential Bitcoin tax on unrealized gains, citing the volatility of crypto markets as a key factor.

In the event of a decrease in holdings value after already paying taxes on unrealized gains, Stork questioned the fairness of such a measure and warned of its potential impact on innovation and businesses in France.

This proposal, which has passed an initial Senate vote, has received support from France’s Finance Minister, Laurent Saint-Martin, who believes that taxing Bitcoin gains differently will create a more balanced system.

If approved, French cryptocurrency holders would need to annually report foreign crypto holdings using the Cerfa 3916-bis form, with fines for non-compliance ranging from €750 to €1,500.

Sébastien Martin, CEO and co-founder of the French crypto risk management firm RAID Square, highlighted the political significance of Vermeillet’s proposal, given her position in the French Parliament and affiliation with the political party backing President Emmanuel Macron.

France’s interest in taxing Bitcoin holders is part of broader crypto regulatory efforts, including recent actions against platforms like Polymarket and ByBit. Additionally, there have been controversial arrests related to privacy issues, like that of Telegram founder Pavel Durov.

Critics have raised concerns about the motivations behind these regulatory actions, but President Macron has denied any political bias.

Edited by Stacy Elliott.