Bitcoin News Today: France's Crypto Tax Sparks Capital Flight Fears as Critics Warn Savers Penalized

France Moves to Tax Large Crypto Holdings as 'Unproductive Wealth'

The French National Assembly has passed a landmark amendment imposing a 1% tax on "unproductive wealth" exceeding 2 million euros, including significant cryptocurrency holdings, as part of a broader effort to incentivize investments in productive sectors of the economy. The measure, backed by centrist, socialist, and far-right lawmakers in a 163-150 vote on October 22, expands the existing real estate wealth tax to cover digital assets like Bitcoin and Ethereum, previously excluded as unproductive goods.

The amendment, introduced by Centrist MP Jean-Paul Matteï, redefines assets such as gold, art, yachts, and cryptocurrencies as "unproductive" if they do not directly contribute to economic growth. Only individuals with unproductive wealth surpassing the 2 million euro threshold will face the flat 1% levy on the excess amount, raising the bar from the previous 1.3 million euro threshold. This contrasts with France's current progressive real estate wealth tax, which ranges from 0% for assets under 800,000 euros to 1.5% for holdings above 10 million euros.

Critics, including Éric Larchevêque, co-founder of crypto wallet provider Ledger, argue the policy penalizes savers seeking stability in assets like Bitcoin. "This punishes all savers who wish to financially anchor themselves to gold and Bitcoin," Larchevêque said, warning that holders may be forced to sell assets to cover the tax if liquidity is lacking. He also expressed concern that the threshold could be lowered in future reforms, broadening the tax's reach.

The amendment aligns with broader European Union discussions on harmonizing digital asset regulations but has sparked fears of capital flight. Experts from the French Banking Federation caution that the tax could drive investors to more crypto-friendly jurisdictions within the EU. Financial analysts estimate up to 50,000 individuals may be affected, based on 2024 wealth distribution data.

While the amendment has cleared the National Assembly, it must still pass the Senate to be included in the 2026 budget. Supporters anticipate implementation by January 1, 2026, given the current momentum. The policy reflects a shift in France's fiscal strategy, integrating digital assets into traditional wealth taxation frameworks.

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