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France's Bold Move to Tax Crypto as "Unproductive Wealth" Sparks Controversy

France has recently proposed a new wealth tax that targets cryptocurrencies, a move that has generated significant debate among industry experts and investors.

The amendment, which passed narrowly in the National Assembly, reclassifies digital assets as "unproductive wealth," alongside luxury items like yachts and gold.

While the tax only affects net wealth exceeding €2 million, critics warn that it could stifle innovation by imposing a flat 1% annual tax on wealth in crypto assets.

This tax does not differentiate between various types of crypto holders, potentially penalizing both casual investors and serious ecosystem builders without a clear framework.

As a result, some industry experts argue that such a blanket policy undermines France's growing status as a hub for Web3 innovation, with fears of capital flight to more crypto-friendly environments abroad.

Moreover, the reform is predicted to generate €1–3 billion annually, though its long-term impact on investment remains uncertain.

Taxpayers will also bear the burden of navigating undefined categories within the crypto landscape, making compliance complicated for prominent investors and businesses.

Overall, the legislation raises questions about the government's willingness to foster digital innovation or inadvertently hinder it through restrictive tax measures.

As it moves to the Senate for final approval, the broader implications for the crypto industry in France are yet to be fully realized.

Investors and stakeholders across Europe will be closely monitoring these developments as they shape the future of cryptocurrency taxation.