French Companies launched an euro stablecoin
Did you know that 3 french companies (Casino (supermarket chain store) Société générale (Bank) and Coinhouse (exchange platform) launched an EUR stablecoin called "Lugh" based on Tezos blockchain (french project) ?
What are the legal issues ?
This launch by French players of a stablecoin pegged to the euro is particularly interesting from a legal perspective. Crypto-assets are considered as securities, a legal category relating to assets representing intangible rights such as shares in companies.
What is a security ?
Gains from the sale of a security are taxed at the progressive income tax rate, i.e. a flat tax of 30% composed of 12.8% tax and 17.2% social security contributions.
If you make both capital gains and losses on the sale of a security in euros, these will be offset for the year in question.
And so, for cryptocurrencies?
Currently, gains from the appreciation of crypto-currencies or cryto-assets are taxed only when converted to euros and not when interchanged between other crypto-currencies. This conception induces for many French users, and a fortiori European, the investment of gains from crypto-assets not to sell their positions in euro, but to convert them into stablecoins not indexed to the euro, such as the USD (Dai, Tether etc. ...).
It is currently considered that these stablecoin earnings, even when backed by a stable currency, are not yet secure.
The legal issue
The existence of a euro registered on blockchain will inevitably raise this question, since gains registered in stablecoin euro have no reason not to be taxed differently just because they are registered on a different medium.
In order to treat these two assets, the "normal" euro and the euro registered on blockchain, differently from a tax point of view, the legislator will have to show that the circumstances are different, and therefore justify a different treatment, but one that is necessary and proportionate to the goal pursued.
Declarative obligation
As a French taxpayer, you must declare your capital gains or losses yourself by means of a specific form and by declaring each of your accounts in crypto-assets. Since it is difficult to communicate each of the addresses of your wallet, it seems that the tax authorities are satisfied with the identity of the account holder in the case of CEX and have not yet decided on DEX and cold wallet.
Final thoughts
The future will tell how the legislator and judges will analyze the use of "Lugh".
Thanks to the 41 subscribers even if I have trouble understanding who enjoys reading this kind of information that can clearly be described as ultra restrictive.