France is preparing to tax cryptocurrency holders on their holdings before they sell, according to a report by BeInCrypto. The plan would mark a structural break from the country's current regime, under which crypto investors owe tax only when they convert digital assets into fiat currency.

The proposal, if enacted, would bring France closer to a wealth-tax style treatment of crypto assets — one in which unrealized gains become taxable events in their own right. That stands in contrast to the framework most major economies apply to digital assets, where capital gains tax is typically triggered only at disposal, exchange into fiat, or use in payment.

What would change for French investors?

Under the existing French framework, cryptocurrency gains are generally taxed at a flat rate when assets are sold or converted. A move toward taxing unsold holdings would shift the taxable event earlier in the investment lifecycle — from realization to mere ownership or appreciation.

For holders, the operational consequences are significant. Investors could face annual tax liabilities on portfolios that have produced no cash proceeds, forcing some to sell assets simply to cover the tax bill — a dynamic familiar to holders of illiquid assets under wealth-tax systems.

For French crypto businesses — exchanges, custodians and broker-dealers operating under the AMF's PSAN registration regime — the change would likely expand reporting obligations. Taxing unrealized gains typically requires authorities to track valuations across time, which in practice means more granular data collection from platforms holding client assets.

How does this fit France's broader posture?

France has positioned itself as one of Europe's more active crypto regulators. Paris hosts a substantial share of the EU's MiCA-licensed operators, and the country has been faster than most member states to register and supervise digital-asset service providers.

A pre-sale tax would sit uneasily alongside that market-building agenda. Industry participants have long argued that taxing paper gains drives capital to friendlier jurisdictions — and France competes directly with Switzerland, Luxembourg and, increasingly, the UAE for crypto businesses and high-net-worth holders.

What happens next?

The proposal must still pass through France's legislative process before it becomes law, and earlier crypto tax initiatives in Europe have been amended or delayed under industry pressure. Investors and platforms with French exposure will be watching whether the final text preserves any realization threshold or exempts smaller holdings, as wealth-tax mechanisms often do.

As drafted, however, the direction of travel is clear: France wants tax revenue from crypto appreciation whether or not holders ever cash out.