Several US authorities have raised concerns regarding the environmental impact of crypto mining. Previously, US lawmakers probed the crypto mining energy use and environmental impact.
Biden’s administration is taking these concerns to another level. Biden’s Council of Economic Advisers (CEA) announced a 30% digital asset mining tax to offset its environmental impact. The new tax rule tagged DAME will take effect after a phase-in period.
Bitcoin Energy Consumption Attracts New Tax Rules
Crypto mining electricity consumption and carbon emission have been a bone of contention in the United States over the past years. A recently published New York Times article claimed Bitcoin has a voracious appetite for electricity, sparking several reactions among crypto community members.
The CEA announced plans to impose a 30% tax on all crypto-mining activities. The council believes the crypto mining industry’s operations negatively impact the environment and is ready to counter them.
The proposed tax, tagged Digital Asset Mining Energy (DAME), aims to make crypto mining firms take responsibility for their environmental impact. According to the CEA’s announcement, the new tax rules will have a phased-in period before taking its course.
Under the new tax guidelines, all mining firms in the US would pay taxes on 30% of their total electricity usage. The CEA feels crypto miners must take responsibility for the environmental pollution they impose on the local community from the increased greenhouse gas emissions.
Also, the CEA believes the crypto firms aren’t fully paying the cost of these pollutions, considering their energy consumption rate. The council cited the recently published New York Times (NYT) article, which criticized the digital asset industry for the environmental impact of its mining operations.
Crypto Community Reacts To New Bitcoin Mining Tax
The proposed DAME tax sparked reactions among members of the crypto community. Many tagged the tax as unfair, criticizing the government for the high tax without incentivizing clean energy usage.
Pierre Rochard, Riot Platforms’ VP of Research, who previously criticized the NYT’s article, condemned the DAME tax.
According to Rochards, the White House targets Bitcoin at the wrong time. To Rochard, the US government should instead focus on the failing banking system.
Featured Image/Pexels, chart/ TradingView
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Author: Mike D.
