The Tax-Free Era of Stablecoins Ends: France Votes by One to Tax Conversions, Singapore Closes the Yield Door on the Same Day

Europe’s first major economy treats stablecoin conversions as taxable events, while Asia’s most cautious regulator locks stablecoins into a payments box. On October 16, the two markets stepped on the accelerator at the same time.

France: 38 to 37, Stablecoin Conversions Are No Longer a “Tax-Free Stopover”

On October 16, the French National Assembly, during the first reading of the 2027 budget bill, adopted Amendment I-3898 by 38 votes to 37 with 25 abstentions (only 100 deputies were present in the chamber). Filed by deputy Nicolas Sansu and 16 co-sponsors, the amendment modifies Article 150 VH bis of the tax code, providing that from January 1, 2027, any conversion of a crypto-asset into an electronic money token (EMT) as defined by Article 3 of MiCA is treated as a taxable disposal, even if the funds never leave the chain and never touch euros.

This breaks a long-standing industry convention in France. Under the current tax regime, crypto-to-crypto swaps (without cash adjustment) enjoy capital gains tax deferral: investors who convert bitcoin or ether into stablecoins to park value trigger no tax liability, and only cashing out to fiat creates a taxable event. The amendment’s essence is to equate “converting into a regulated stablecoin” with “selling for cash” in law. Public Accounts Minister David Amiel publicly urged the chamber to withdraw the amendment, arguing implementation is too difficult, and that defining the scope of covered tokens and tracking reallocations within crypto portfolios both need more study. The chamber passed it anyway by a single vote.

The tax rate remains the existing 31.4% flat regime (12.8% income tax plus 18.6% social contributions); the amendment itself sets no new rate. The calculation method is also rewritten: taxable gain equals disposal proceeds minus the acquisition cost of the asset sold, with a weighted-average acquisition cost for tokens of the same kind; for assets acquired before 2027, investors may allocate the portfolio’s total cost as of December 31, 2026, and that choice is irrevocable after the first qualifying return. A concrete example: bitcoin with a cost basis of EUR 6,000 converted into USDC worth EUR 10,000 yields a EUR 4,000 gain and an immediate tax bill of roughly EUR 1,256, while the investor holds no euros at all. For high-frequency traders, arbitrageurs and DeFi users who treat stablecoins as a low-volatility “parking asset,” every move into a regulated stablecoin becomes a potential taxable event.

The most notable boundary of the amendment is that it uses MiCA’s asset definition rather than issuer authorization as the trigger for taxation. This means only regulated single-currency stablecoins (USDC, EURC) fall inside the tax net, while tokens without MiCA authorization such as USDT are excluded. Chainalysis warns on this basis that the tax differential could push volume toward unregulated channels, creating an incentive opposite to the legislative intent. This is not France’s first attempt: the finance committee passed the identical committee amendment I-CF1826 on October 7, and this is its plenary-session counterpart. The amendment has only completed its first reading; it still faces the October 20 vote on the budget’s first part, the November 17 vote on the full bill, and Senate scrutiny. It is not yet law, but the direction is clear. France’s move echoes earlier adopters: the UK and Italy have already legislated stablecoin conversions into the taxable scope, and France’s entry accelerates the diffusion of this trend within the EU.

Singapore: On the Same Day, Stablecoins Get Locked in the “Payments” Cage

At almost the same moment, MAS closed the comment window for consultation paper P015-2026 (published September 1, comments due October 16), planning to turn the stablecoin framework from a policy document into statute through amendments to the Payment Services Act 2019. The framework stems from the first consultation of October 26, 2022 and the final response published August 15, 2023, covering single-currency stablecoins (SCS) issued in Singapore and pegged to the Singapore dollar or any G10 currency. The core of this legislative revision is adding a new “stablecoin issuance service” category to the list of regulated payment services: entities without a licence may not hold themselves out as issuing MAS-regulated stablecoins or use the “MAS-regulated stablecoin” label.

Four hard constraints accompany the licence. First, reserve assets must at all times be no less than 100% of the par value of tokens in circulation, marked to market daily, held in segregated accounts with licensed financial institutions in Singapore or comparable overseas jurisdictions, and kept separate from the issuer’s own assets. Second, holders enjoy a direct legal claim to redeem at par, and issuers must complete redemptions in the pegged currency within MAS-prescribed timeframes. Third, issuers of MAS-regulated stablecoins may in principle not carry on other regulated activities at the same time. Fourth, and most critically, issuers are barred from paying interest, yield, or any form of return attributable to holding the stablecoin.

The logic of the interest ban is straightforward: paying interest pushes stablecoins toward “deposit-like” products, dragging them into banking regulation and eroding their function as payment instruments. MAS has repeatedly stated since 2022 that stablecoins should operate as a neutral medium of exchange, not compete with bank deposits or money market funds as investment products. An issuer that breaches the ban loses its MAS-regulated status and is effectively barred from marketing tokens as regulated stablecoins in Singapore. The authority also proposes adding a systemic designation power under the Payment Services Act, allowing MAS to designate a stablecoin as systemic whether it is issued in Singapore or abroad if it poses systemic risk, and to apply enhanced requirements.

The consultation leaves two key points open. First, the minimum share of cash and bank deposits in reserves: MAS cites ranges used or planned in the UK and EU, roughly 5%-30% for non-systemic stablecoins and 40%-60% for systemic ones, but does not set its own threshold, instead seeking market views. Second, the boundary of “yield”: whether the ban extends to indirect forms of return, such as revenue-sharing with third-party platforms, cash-convertible loyalty points, or holding-period-linked airdrops, MAS gives no substance-over-form test, a gap of major significance to global issuers. MAS also proposes allowing stablecoins jointly issued by a Singapore entity and a foreign issuer to qualify once risks are adequately mitigated, and is considering limited recognition of a small number of foreign stablecoins under comparable overseas frameworks, mainly for cross-border wholesale use.

MAS Deputy Managing Director Ho Hern Shin said when launching the consultation on September 1: “MAS’ proposed legislative amendments will give effect to a stablecoin framework that promotes responsible financial innovation. As asset tokenisation gains traction, trusted and well-regulated stablecoins can serve as a credible settlement asset in tokenised financial markets.” She also explained that the MAS label is not an endorsement: it does not mean central-bank backing, does not eliminate redemption risk, and does not constitute deposit insurance. The statement is as restrained as the framework itself: Singapore grants stablecoins a “legal identity” while deliberately defining them as a constrained payment instrument, not an investment product.

Three Signals Converge: Stablecoins Are Shifting from “Asset-Class” to “Currency-Like”

Placing the three developments in France, Singapore and the US OCC on a single timeline reveals a structural judgment: the stablecoin regulatory paradigm is shifting from “asset regulation” to “currency regulation.” Asset regulation cares about disclosure, custody and investor protection; currency regulation cares about the three properties of a payment instrument, namely value stability, free convertibility, and no speculative yield. France eliminates “conversion tax avoidance” on the tax side, Singapore eliminates “yield on holdings” on the conduct side, and the US enforces “100% reserves plus no interest” on the issuance side. These directions converge on the same endpoint: stablecoins returning to their nature as payment instruments.

For the industry, this means the underlying assumptions of the stablecoin business model are failing. For years, issuers and DeFi protocols have treated “earning yield on stablecoin holdings” as a core selling point, from Coinbase’s USDC rewards to various “yield stablecoin” protocols, all of which in essence package a payment instrument as a yield product. France’s tax reform punishes this packaging directly: every move of floating gains into a stablecoin parking position triggers tax. The MAS ban prohibits it outright: interest, rebates, staking rewards and promotional returns all fall within the prohibition. The US GENIUS Act codifies the same principle at the federal level. Multiple regulators have reached the same conclusion independently: stablecoins are not a substitute for money market funds.

The boundary questions deserve equal attention. France’s reform covers only MiCA-compliant stablecoins (USDC, EURC) and lets non-compliant tokens like USDT off the hook, a dangerous incentive misalignment: compliance is taxed while non-compliance escapes. Chainalysis has already warned on this point. In Singapore, MAS has not yet clarified whether the yield ban covers indirect forms of return, nor set a final threshold for the cash share of reserves. These grey zones are precisely the variables global issuers’ compliance teams should watch most closely in the coming months. Combined with the coincidence that France’s budget vote and the SEC Reg Crypto Assets comment deadline both land on October 20, the next two weeks will stress-test the final shape of this regulatory turn.

Takeaways for Practitioners