France is currently navigating a complex and seemingly contradictory path in its approach to cryptocurrency, unveiling two significant policy initiatives that reflect both fiscal caution and monetary ambition. Within a single week, the nation proposed a broadened wealth tax that explicitly includes digital assets as "unproductive wealth," while simultaneously tabling a bill to establish a national Bitcoin reserve, treating the digital currency as a strategic asset for statecraft. This dual strategy underscores France's conflicted but consequential stance, setting a unique precedent for how a major European economy views and integrates digital finance.
Taxing Private Crypto: Unproductive Wealth
At one end of the spectrum, the French National Assembly adopted an amendment that rebrands the country's real estate wealth tax into a broader "tax on unproductive wealth." This crucial change means that digital assets, including cryptocurrencies, are now explicitly covered under a flat 1% tax on net taxable wealth exceeding €2 million. Previously exempt items like luxury cars and fine art also fall under this new category. Critics argue that this measure amounts to taxing latent gains rather than realized income, potentially penalizing investment in digital finance and risking an exodus of crypto businesses to more lenient jurisdictions. The industry has reacted sharply, warning that treating crypto as "decorative wealth" rather than working capital could stifle innovation and liquidity.
Building a National Bitcoin Reserve: Statecraft and Sovereignty
Concurrently, France's right-wing Union des droites pour la République (UDR) introduced a bold bill to create a public body tasked with accumulating a national Bitcoin reserve of approximately 420,000 BTC, aiming for 2% of Bitcoin’s total supply over seven to eight years. This proposal frames Bitcoin as a strategic asset vital for energy monetization, monetary independence, and digital infrastructure, invoking the language of national sovereignty. The bill outlines ambitious funding mechanisms, including state-funded mining using surplus electricity, acquiring confiscated crypto, and even reallocating dormant public deposits. Furthermore, it envisions integrating Bitcoin into France's fiscal architecture by allowing citizens to pay certain taxes in BTC and introducing a daily exemption for euro-stablecoin payments, signaling a profound shift towards state-level adoption.
A Nation Divided: Navigating the Policy Paradox
While seemingly at odds – one policy penalizing private crypto accumulation and the other encouraging state hoarding – these two initiatives are not mutually exclusive from a legal standpoint. The wealth tax targets individual balance sheets, whereas the reserve bill concerns the state’s holdings, which would likely be exempt. However, practical tensions are inevitable: taxing private holdings increases the cost of domestic accumulation, potentially making state acquisition more expensive, while aggressive state accumulation could inflate the taxable base for private investors. This places France at the crossroads of two global models: wealth-based crypto taxation (seen in Switzerland) and sovereign Bitcoin reserves (like El Salvador's). The ultimate legislative fate of these proposals remains uncertain, but they undeniably set the tone for France's future in digital finance – a nation ready to tax crypto like art while simultaneously contemplating stacking it like gold.
