President Joe Biden's administration has released a revenue proposal for fiscal year 2025 that places a major emphasis on the regulation of digital assets. The administration has taken a tough stance on environmental controls and intends to impose a 30% tax on electricity consumed by mining companies.
Previously, in May 2023, Biden had already attacked the crypto sector and proposed to introduce an excise tax on digital asset mining energy (DAME), motivated by environmental concerns.
Such measures are explained by the need to minimize the negative impact of energy-intensive cryptocurrency mining on the environment.
The US Treasury Department's plan, titled "General Explanations of the Administration's Fiscal Year 2025 Revenue Proposals," seeks to address the current regulatory gap regarding cryptoassets. The document states that the growing demand for electricity from cryptomining companies is harming the environment by destroying it.
The Treasury also cited environmental justice issues, as mining operations threaten the stability of local households and businesses.
The tax on miners being drafted by President Biden's administration includes a calculation of 30% of electricity costs. As such, mining companies would be required to disclose the amount and type of electricity they use, and consumers of outside energy would be required to report their costs.
"A tax on electricity consumption by miners could reduce cryptocurrency mining activities and the associated harmful environmental impacts," the government's proposal reads.
Under the new tax scheme, mining companies will report on the amount and cost of electricity they consume. The tax will be phased in over three years, starting January 1, 2025, with a 10% tax in the first year and a 30% tax in the third year.
After the publication of the proposal of the Ministry of Finance on March 11, 2024, criticism of the project began. Senator Cynthia Lummis opposed it, expressing fears that such measures would stop the development of the crypto industry in the United States.
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House Speaker Mike Johnson also condemned the project: "The price tag of President Biden’s proposed budget is yet another glaring reminder of this administration’s insatiable appetite for reckless spending and the Democrats’ disregard for fiscal responsibility."
However, there is another view: Pierre Rochard of Riot Platform said that the government tax suggests restrictions on Bitcoin and will encourage the development of a central bank digital currency (CBDC).
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