Joe Biden wants 30% tax on Bitcoin and cryptocurrency mining

The US Treasury Department has proposed a series of tax measures that will affect the cryptocurrency market. Among other things, the Joe Biden administration wants to impose a 30% excise tax on electricity used to mine cryptocurrencies.

The proposal can only be applied to proof-of-work encryption. And since virtually every major cryptocurrency except Bitcoin has moved to some other form of consensus-building, this tax hike could be seen as an attack on Bitcoin.

Annual increase in mining excise

The Treasury Department shared a list of fiscal proposals and explained the US president’s budget proposal. One of the proposals is the gradual introduction of a tax on the cost of electricity used in cryptocurrency mining.

Miners use this stream on their computers to “find” new cryptocurrencies. Mining companies must also report how much electricity they consume and what type of electricity is used. The tax would be rolled out gradually over the next three years, increasing by 10% each year.

Intends to reduce the number of miners

The provision states that the purpose of this tax is to reduce the number of miners in the US:

“The increase in energy consumption due to the growth of digital asset mining has negative environmental implications and could have implications for environmental justice and rising energy prices for those who share a power grid with digital asset miners.”

“Digital asset mining also creates uncertainty and risk for utilities and local communities as mining operations are highly diversified and highly mobile. An energy consumption tax for miners of digital assets could reduce mining activities and the associated environmental impact and other harms.”

Republicans have not yet voted

For now, you can see the budget as a suggestion. In American politics, these kinds of proposals have yet to be approved by others, including the House of Representatives.

This house is mainly inhabited by Republicans, Biden’s political opponents. It is very unlikely that the proposal will be adopted without amendments.

Still, the proposal can be seen as a kind of fiscal prioritization by Biden in preparation for new elections.

Biden cited another measure he wanted to counter fake trading volumes on exchanges called wash trading.

Source: Btc Direct