The Biden administration proposes to impose a 30% tax on electricity used for mining

US President Joe Biden recently announced a 2024 budget proposal, which includes a provision specifically for mining.

The Biden administration proposes to impose a 30% tax on electricity used for mining

On March 9, the White House released President Biden’s 2024 budget proposal, outlining his policy priorities for the coming year. In it, the US Treasury Department wants to impose a 30% excise tax on energy costs for cryptocurrency mining.

The new provision will levy a phased excise tax on the electricity costs of companies “using computing resources” to mine coins. This tax rate takes effect from December 31, increasing 10% per year for the next 3 years. At the same time, taxable units are responsible for reporting the amount of electricity used.

The above move will reduce mining activities along with harmful effects on the environment, proposed to present:

“Digital asset mining has had a negative impact on the environment as well as adding pressure on energy prices to grid users and creating risks for utilities. local community.”

The statement also states that the White House is looking to end the tax deduction for cryptocurrency transactions that it estimates will generate more than $24 billion.

The current regulatory framework allows investors to sell losing digital assets and immediately buy them back, to evade transaction taxes. However, the new regulation will “treat” cryptocurrencies similarly to securities and prevent such tax evasion.

March 9 is also the 1 year anniversary of President Biden issuing an executive order to “pro-crypto” cryptocurrency. At the time, this order was expected to direct federal agencies to coordinate in promoting research on aspects of the crypto sector with the ultimate goal of building a formal regulatory framework. Thanks to this positive news, the cryptocurrency market at that time grew quite impressively.

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