France Moves to Regulate Self-Custodied Crypto Assets with New Declaration Threshold

French lawmakers have taken a significant step toward tightening oversight of cryptocurrency holdings. On November 3, the National Assembly approved an amendment that introduces declaration requirements for certain crypto assets. The measure, designated I-2701, mandates taxpayers to report self-custodied digital assets valued at €100,000 or more (approximately $112,000) to tax authorities.

Key Provisions and Implementation Details

The amendment specifies that asset valuation will be based on holdings as of December 31 of the relevant tax year. This approach gives French tax authorities clearer visibility into substantial self-custodied crypto holdings, laying groundwork for future tax enforcement measures.

Currently embedded in the draft 2027 finance bill, the provision must survive the full legislative process to become law. The National Assembly must complete the first reading by November 17, with Senate debates scheduled to begin on November 20.

Legislative Decisions and Rejected Measures

During the same parliamentary session, legislators rejected a separate amendment that had drawn attention. That proposal would have exempted crypto payments totaling less than €1,000 per tax year from capital gains tax, but failed with 69 votes against and 14 in favor.

The legislative process remains fluid due to interlinked components of the finance bill. Faustine Fleuret, Global Head of Public Affairs at Morpho, noted that rejection of the budget revenue section could lead to the entire bill—including passed amendments—being overturned. This procedural complexity leaves the final outcome uncertain.

Implications for Crypto Asset Holders

If enacted, the amendment would directly affect crypto holders in France:

  • Assets in self-custodied wallets become subject to declaration
  • The €100,000 threshold could impact a considerable number of investors
  • Clearer compliance requirements come with increased reporting obligations
  • Tax relief for small crypto payments remains unavailable for now

France's move aligns with a global trend of strengthening crypto asset regulation. As digital asset markets mature, tax authorities worldwide are developing frameworks to incorporate these holdings into taxation systems. For investors, staying informed about regulatory changes in their jurisdiction and adapting management strategies accordingly is becoming increasingly crucial.