France's proposed 31.4% tax on regulated stablecoins faces criticism from industry leaders who argue it will drive liquidity to unregulated offshore exchanges.
The proposed 31.4% tax on regulated stablecoins in France, as highlighted by Chainalysis CEO Francois Volpoet, creates a significant financial disincentive for local market participants. This fiscal burden is expected to drive liquidity and trading volume away from compliant, regulated platforms toward unmonitored offshore alternatives, thereby undermining the adoption of regulated digital assets.
The primary concern is that a 31.4% tax rate will incentivize traders to bypass regulated channels in favor of unmonitored offshore platforms.
Francois Volpoet, the CEO of Chainalysis in France, issued the warning regarding the potential market shift.
Chainalysis France CEO Francois Volpoet warns that a new 31.4% tax on regulated stablecoins could trigger a mass exodus of traders. The policy risks pushing capital toward unmonitored offshore platforms, undermining local regulatory efforts.
Critics argue the 31.4% rate is prohibitively high and will incentivize traders to move their activities to offshore, unmonitored platforms, thereby reducing the market share of regulated assets.