France wants to tax unrealized crypto holdings but also hoard 420,000 BTC

In the course of a frenetic week, France has unveiled seemingly opposing policy tracks.

On October 31, the French National Assembly adopted an amendment in first reading that changed the country’s wealth tax only in real estate in a broader “tax on unproductive wealth” which now explicitly covers digital assets.

At the same time, the right-wing Union des Droits pour la République (UDR) presented a bill to establish a national bitcoin reserve of approximately 420,000 BTC, with the goal of maintaining 2% of the total Bitcoin supply over the next seven to eight years.

One measure treats crypto shares as inactive ballast to be taxed; the other elevates them as national reserve assets. Taken together, they capture the conflicted but consequential position of France towards crypto, caught between fiscal prudence and monetary ambition.

The new wealth tax: crypto as “unproductive” capital.

Under modification Drafted by MoDem MP Jean-Paul Mattei and revised by Socialist MP Philippe Brun, a flat tax of 1% would apply to net taxable wealth above €2 million. Crucially, the tax base now widens to include traditionally exempt assets such as collector cars, art, luxury yachts, and “actifs numériques” (digital assets), including cryptocurrencies.

The explanatory note specifies that “tangible movable property … digital assets … life insurance for funds not allocated to productive investment” previously excluded are now covered in the “unproductive” category.

A French resident with a substantial crypto portfolio could therefore face an annual tax, even if he does not sell. Critics argue that this amounts to taxing latent earnings rather than realized income and risks penalizing investment in digital finance. The move has sparked a strong backlash across France’s crypto industry, with executives warning that it will drive trading banks and asset management arms toward more lenient jurisdictions.

The bitcoin reserve: stacking state meets sovereignty

At the same time, the UDR, led by Éric Ciotti, presented a “invoice” which establishes a public body tasked with building a national Bitcoin reserve of 420,000 BTC.

The reports describe a plan that involves state-funded mining, the purchase of seized coins, and an option to pay taxes in crypto. The project presents Bitcoin as a strategic asset that combines energy, monetary independence and digital infrastructure. Its authors invoke the language of sovereignty, representing Bitcoin as “digital gold” that can fortify national reserves in an era of dedollarization.

Although the proposal faces a long chance in a fragmented parliament, it reflects a growing trend in European right-wing parties that sees bitcoin not as speculation, but as a form of statecraft.

What is less discussed is how much the text goes in sketching the mechanics of the accumulation. The project instructs the newly created public entity, Réserve stratégique de bitcoins, to acquire 2% of the total supply of Bitcoin (about 420,000 BTC) in seven to eight years, and to do so without incurring any cost directly to the state budget.

It lists potential financing channels, such as mining with state surplus electricity, the transfer of crypto confiscated by judicial processes, and even the reallocation of dormant public deposits such as those in the Livret A savings scheme.

The proposal would also authorize French citizens to pay certain taxes in Bitcoin and introduce an exemption of €200 per day for euro-stablecoin payments, embedding the use of crypto at the treasury and retail level. These details indicate that the project’s ambition extends far beyond the symbolic, as it sees Bitcoin integrated into France’s fiscal and monetary architecture, from energy monetization to everyday payments.

At first glance, the two initiatives appear to be in conflict, with one penalizing private crypto hoarding and the other encouraging public hoarding. Legally, however, they can coexist.
The wealth tax amendment targets individual budgets, while the reserve bill concerns state budgets. Public companies will probably be exempted from the tax regime, leaving the private holders ​​above the annual assessment and reporting duties. In practice, the tension would arise due to market effects.

Tassing crypto holdings increases the cost of private accumulation and could reduce domestic supply, which in turn increases acquisition costs for the reserve. On the contrary, aggressive state accumulation would tighten liquidity and inflate the taxable base for private investors, forcing the government to navigate the feedback loop it has created.

Between the political paradox and the precedent

France’s approach puts it at the crossroads of two world models. Taxation based on crypto wealth already exists in Switzerland, Spain and Norway, where digital assets are declared and assessed annually. Those systems tax the stock of wealth, not realized earnings, and France’s new framework follows that lineage.

In contrast, the idea of ​​a sovereign Bitcoin reserve is found in Paris alongside experiments such as El Salvadoralbeit filtered through a European lens of institutional management rather than presidential decree.

The reaction of the industry in France was swift and unflattering. Start-ups and exchanges warn that the amendment treats crypto as decorative wealth rather than working capital, equating it with yachts and watches. Marking annual bonds to market, they say, creates a liquidity strain and valuation uncertainty.

When it comes to policymakers, the counterargument is based on precedent: wealth taxes have long targeted unproductive capital, and modern tax law already applies mark-to-market accounting to some financial instruments.

The reaction of the industry in France was swift and unflattering. Start-ups and exchanges warn that the amendment treats crypto as decorative wealth rather than working capital, equating it with yachts and watches. Marking annual bonds to market, they say, creates a liquidity strain and valuation uncertainty.

Politically, the contrast is so stark. The wealth tax amendment moved forward with an unusual coalition of centrists, socialists and far-right MPs. At the same time, the UDR’s reserve project originated from a small conservative bloc with little parliamentary leverage.

If only the tax passes, France will tighten its grip on private companies while crushing the reserve dream. If both move forward, the result would be paradoxical: private crypto treated as a taxable luxury, Bitcoin elevated status to sovereign wealth. Each could function independently, but together they would change how France values ​​and controls digital assets.

For now, both proposals remain in flux. The text of the wealth tax heads to the Senate, where lawmakers can refine the definition of “digital assets” or introduce carve-outs for productive use. The Bitcoin reserve bill awaits committee reference and debate.

Whatever their legislative fate, they have already set the tone for France’s next chapter in digital finance: a nation ready to tax crypto like art while contemplating hoarding it like gold.