Victory for US Cryptocurrency Miners as Proposed Electricity Tax Gets Dropped
In a significant turn of events for cryptocurrency miners in the United States, the proposed tax on their electricity usage has been dropped, according to Republican congressman Warren Davidson. This development comes as part of the negotiations between President Joe Biden and House Speaker Kevin McCarthy to raise the country’s debt ceiling until January 2025.
The debt ceiling represents the maximum amount of debt the government is allowed to issue. By increasing the debt ceiling, the government can borrow more money to meet its financial obligations and prevent a potential default. The agreement to extend the debt ceiling past the next presidential election marks a critical decision in ensuring the stability of the nation’s financial affairs.
Confirming the news about the proposed crypto tax, Rep. Davidson (R-Ohio) took to Twitter on Monday, acknowledging the victory. He responded to Pierre Rochard, the VP of Research at crypto miner Riot Platform, who had noted the absence of bitcoin mining in the new bill outlining the terms to raise the debt ceiling.
The proposed tax, known as the Digital Assets Mining Energy (DAME) excise act, was introduced by the White House in early May. It aimed to impose a 10% tax on cryptocurrency miners’ electricity usage starting in 2024, gradually escalating to 30% by 2026. The White House argued that the tax was necessary due to the significant energy consumption by miners and its environmental impact. It also projected that the DAME act would generate $3.5 billion in revenue over a span of ten years.
Yes, one of the victories is blocking proposed taxes.
— Warren Davidson 🇺🇸 (@WarrenDavidson) May 29, 2023
However, the introduction of the mining tax sparked a wave of backlash from crypto miners who felt it was an attempt to sideline and marginalize the crypto community. Many argued that it would stifle innovation and hinder the growth of the industry.
In response to the proposed tax, Bit Digital, a New York-based crypto mining company, announced plans to expand its operations to Iceland as a proactive measure to protect its business. The move to a more crypto-friendly jurisdiction allowed them to ensure uninterrupted mining operations and escape the potential financial burden imposed by the tax.
Although the White House and the US Treasury have not officially confirmed the scrapping of the mining tax, this development signals a favorable outcome for cryptocurrency miners. However, it is essential to note that the tax proposal is currently on hold as the debt ceiling deal awaits approval from both the House and Senate to become law.
The decision to drop the tax on cryptocurrency miners’ electricity usage reflects the significance of the crypto industry and its growing influence in the United States. As the government navigates the delicate balance between regulating the industry and fostering its growth, this latest development will provide relief to miners and may encourage further innovation and investment in the sector.
As the debt ceiling deal progresses through the legislative process, the fate of the proposed tax and its potential implications for the crypto community will continue to unfold.
- Bitcoin Miners’ Shift In Selling Strategies: Decreasing Flows To Exchanges
- Bitcoin Miners Rake In Massive Profits With Bitcoin NFT And Meme Coin, Reports Bloomberg