As part of the 2024 budget, the Biden administration has made a proposal to tax crypto mining companies 30% of the amount of electricity they consume.
As we all know, crypto mining involves the use of powerful computer systems to solve complex mathematical equations to validate transactions on a blockchain network. This process requires a significant amount of energy, which has raised concerns about the environmental impact of crypto mining. For Biden, the solution is to tax miners, what do you think?
Indeed, Gov. Biden said Tuesday that the new Digital Asset Mining Energy Tax proposal would seek to implement a tax on crypto miners that would be 30% of the amount of electricity consumed during their activity.
Crypto mining will have to make an effort
Currently, crypto mining companies do not have to pay the cost they impose on others in the form of local environmental pollution, higher energy prices, and the climate impacts of increased greenhouse gas emissions. The DAME tax provides an incentive for companies to better consider the damage they are doing to society,” a statement said.
According to the Biden administration, the “high” energy consumption of digital coin miners creates “negative impacts on the environment and power grids” even when they use green energy. “The intensive and often volatile energy consumption of cryptominers can also drive up electricity prices,” she says.
“In addition to these known costs and risks, cryptomining does not generate the local and national economic benefits typically associated with businesses using similar amounts of electricity. Instead, energy is used to generate digital assets with broader social benefits that have yet to materialize,” the statement concludes, noting that the tax is expected to raise $3.5 billion over the next 10 years.
Environment: Crypto mining will have to make an effort in the U.S.
There are many large crypto-mining firms in the U.S. today, including several that are publicly traded. These include Marathon Digital, Greenidge and Terawulf.
It remains to be seen how the proposed tax will be received by lawmakers and regulators. Some experts have suggested that it could face legal challenges, while others have argued that it could be a step toward greater regulation of the crypto-industry.
Whatever the outcome, the proposed tax is likely to fuel the ongoing debate about the environmental impact of crypto mining and the role of governments in regulating the industry.