- The Biden administration is proposing a 30% tax on crypto mining to combat its negative effect on the environment.
- The Council of Economic Advisers proposes the DAME tax, which seeks to hold cryptocurrency companies accountable for their environmental impact
- The cryptomining community criticizes the measure and considers it unfair, claiming that it does not encourage the use of clean energy
The Biden administration seeks to impose a 30% tax on crypto mining to address its environmental impact. The Council of Economic Advisers announced the proposal for the new tax, called the excise tax on energy and mining of digital assets (DAME), which would come into force after a transition period.
Environmental impact of crypto mining
The Council of Economic Advisers believes that cryptocurrency mining is associated with a strong negative impact on the environment and that companies must take responsibility for it.
The proposal seeks to make cryptocurrency companies pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate.
The crypto mining community has criticized the DAME tax, arguing that it is unfair and does not encourage the use of clean energy. They have also stated that there are other industries to blame for some of the problems mentioned in the publication.
The proposal has also been criticized by experts in the crypto space, who consider it the worst time to draw attention to Bitcoin.
Changes in the environment for cryptocurrency mining
Despite industry resistance, the environment for cryptocurrency mining is changing. Some states, such as North Carolina and Texas, are discussing measures to limit cryptocurrency mining.
Furthermore, the DAME tax proposal could encourage cryptocurrency companies to seek cleaner and more environmentally sustainable alternatives.
Bitcoin mining has increased in the United States since China banned crypto mining. Bitcoin mining stocks have also outperformed tech stocks in 2023 with Core Scientific being the biggest gainer.