French Lawmakers Push for Strict Self-Custody Crypto Reporting in New Budget Proposal

The French National Assembly’s Finance Committee has advanced a contentious legislative proposal that would require residents to officially report self-custodied cryptocurrency holdings valued at 100,000 euros ($112,000) or more. The measure aims to tighten regulatory oversight over digital assets held outside of traditional exchanges and custodial services, introducing severe financial penalties for individuals who fail to comply with the proposed disclosure rules.

The specific measure, identified as amendment number I-CF821, was officially adopted by the Finance Committee on Friday. If enacted into law, the provision would fundamentally alter how French tax authorities monitor digital wealth, extending mandatory reporting obligations directly to private, non-custodial storage solutions such as hardware wallets, paper wallets, and self-managed software applications.

Under the text of the adopted amendment, the proposed rules would integrate directly into France’s general tax code. Taxpayers possessing qualifying digital asset portfolios would be legally obligated to disclose these holdings annually, using the estimated market value of the assets as of December 31st of each applicable tax year. The proposal also outlines punitive measures for non-compliance, establishing potential administrative fines of up to 10,000 euros for individuals who intentionally or negligently fail to declare their eligible self-custodied crypto wealth.

The primary architects and sponsors behind the measure argue that the regulation is a necessary and proportionate step toward combating systemic tax evasion and closing regulatory loopholes within the rapidly expanding digital economy. To justify the necessity of the reporting requirement, the sponsors pointed to a recent parliamentary inquiry centered on the taxation patterns of high-net-worth individuals. According to findings highlighted during the inquiry, estimated cryptocurrency capital gains in France reached an astronomical 3.5 billion euros in the single tax year of 2021. In stark contrast, however, only 400 million euros in crypto-related holdings were formally declared to French tax authorities for that same period, revealing a massive disparity that lawmakers are now aggressively seeking to address.

Proposal faces significant legislative hurdles

The high-stakes wallet disclosure amendment was introduced to the committee by Charles de Courson, Jean-Pierre Bataille, and Michel Castellani. All three lawmakers belong to France’s Liberties, Independents, Overseas and Territories, commonly known as the LIOT parliamentary group, a centrist and regionalist coalition within the National Assembly.

The self-custody wallet disclosure measure was not an isolated policy shift. Instead, it formed part of a broader package of regulatory maneuvers, standing out as one of five distinct cryptocurrency-related amendments successfully adopted by the Finance Committee during its busy legislative sessions last week.

This string of proposals aligns with a broader governmental push to overhaul digital asset taxation. Earlier reports highlighted other aggressive measures considered by the committee, including a plan to impose a specialized exit tax on cryptocurrency holdings exceeding 800,000 euros whenever resident taxpayers decide to move abroad. Another controversial proposal targeted the mechanics of digital asset trading by seeking to eliminate existing tax deferrals currently granted when investors convert cryptocurrencies directly into fiat-backed stablecoins.

Despite the initial success of these measures within the Finance Committee on Friday, the broader legislative journey for the policy package hit an immediate and severe roadblock shortly afterward. In a surprising turn of events, lawmakers on the committee subsequently voted to reject the entire revenue section of the wider 2027 budget bill by a decisive margin of 31 votes to 3.

This committee-level rejection means that the hard-fought crypto amendments have temporarily lost their vehicle within the legislative pipeline. Nevertheless, the policy debate is far from over. French lawmakers are officially scheduled to resume intense floor debates regarding the revenue section of the upcoming budget directly within the National Assembly on Tuesday. These upcoming parliamentary proceedings will begin by focusing on the government’s original draft, effectively stripping away the committee’s recent additions for the time being.

Consequently, for the crypto-related amendments—including the self-custody reporting requirement and the stablecoin tax adjustments—to ultimately become codified into law, they must be formally reintroduced, debated, and re-approved during the upcoming plenary sessions of the parliament. According to analysis from prominent French tech publication Clubic, the path forward will require renewed political backing and successful parliamentary maneuvering as the wider national budget debate continues to unfold in the coming days.