The French Senate adopted a bill on Tuesday to enable tax authorities to automatically exchange cryptocurrency transaction data with foreign counterparts. The legislation, which passed its first reading and was transmitted to the National Assembly as Bill no. 3421, covers an agreement on exchanging crypto tax information and updates an existing agreement on financial account information. This crypto agreement is based on the Crypto-Asset Reporting Framework (CARF) developed by the Organisation for Economic Co-operation and Development (OECD), which sets common standards for participating jurisdictions to collect and automatically exchange information on crypto transactions.
France already introduced crypto reporting obligations through the 2025 Finance Act, implementing the crypto reporting amendment to the European Union’s Directive on Administrative Cooperation, known as DAC8. These rules require crypto service providers to report customer identities and transaction data to tax authorities, who then share the information with authorities in users’ EU countries of residence. Separately, French lawmakers are debating crypto tax changes in the 2027 budget. On Oct. 16, the National Assembly adopted an amendment that would make gains from conversions into certain fiat-pegged stablecoins taxable from Jan. 1, 2027, though this measure is not yet law. Debate on the budget’s revenue section resumed on Tuesday, with a vote scheduled for Nov. 3.
Faustine Fleuret, global head of public affairs at lending protocol Morpho, raised concerns about data security under DAC8, noting it involves sharing personal information such as names, addresses, tax numbers, and transaction volumes between EU tax authorities. The European Commission plans to create a central repository for crypto reports by the end of 2026, allowing each member state’s tax authorities to access information concerning their tax residents. Fleuret warned that centralizing this information could create a “single point of failure” for sensitive crypto transaction data. Her remarks follow a rise in physical attacks targeting cryptocurrency investors; during the first half of 2026, France accounted for 33 of the 52 verified wrench attacks worldwide, according to blockchain security company CertiK.
The Senate's adoption of the CARF-based bill signifies France's commitment to aligning its fiscal surveillance with international OECD standards, moving beyond domestic enforcement to cross-border transparency. By integrating crypto data exchange into existing financial account frameworks, legislators aim to close loopholes where digital asset holdings might otherwise evade detection in one jurisdiction while being visible in another. This legislative step reinforces the trend toward treating crypto assets similarly to traditional financial instruments regarding tax compliance, potentially reducing the anonymity benefits historically associated with decentralized finance.
However, the operational risks highlighted by industry experts like Faustine Fleuret underscore a critical tension between regulatory efficiency and user security. The planned centralization of sensitive data via the European Commission’s repository creates a high-value target for cybercriminals, particularly given the documented surge in physical "wrench attacks" in France. While the legal framework seeks to ensure tax equity, the practical implementation must address these vulnerabilities to prevent the very crimes—such as the $1 million Bitcoin robbery in March—that illustrate the dangers of exposing investor identities and holdings without robust protective measures.
