The US authorities wanted to introduce a 30 energy
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The US authorities wanted to introduce a 30% energy tax for cryptocurrency mining

The President of the United States proposed introducing an additional 30% tax on the cost of electricity used to mine cryptocurrencies. The excise tax proposal would be the country’s most drastic measure to curb the uncontrolled use of electricity for mining.

    Image source: freepik

Image source: freepik

This week, Joe Biden unveiled his plan for the Digital Asset Mining Excise Tax (DAME) bill to US lawmakers. Citing the environmental impact of power generation, as well as higher energy prices for all other industries, the end result of DAME’s launch should be a massive 30 percent tax on energy used to mine cryptocurrency.

The DAME Act is not the first time U.S. government agencies have attempted to directly legalize cryptocurrency mining in order to limit or increase it. While cryptocurrency laws are still in their infancy, at the federal level, cryptocurrencies can be considered either a security or a commodity and are therefore taxed based on their US dollar value. Cryptocurrency exchanges are subject to the Bank Secrecy Act and other federal financial laws. One of the Biden administration’s priorities is creating a broader national regulatory policy for cryptocurrencies.

The impact of cryptocurrency production on energy systems has become an international issue. In addition to huge amounts of energy being legally converted into digital assets without (as the White House put it) “local and national economic benefits typically associated with businesses consuming the same amount of electricity’, illegal cryptocurrency farms using stolen electricity are regularly discovered, and botnets often exploit infected PCs for cryptocurrency mining. Previously, China and several other countries had banned cryptocurrency exchanges – more out of a desire to regulate money transfers than curb electricity use.

Despite growing interest in cryptocurrency regulation, President Biden’s DAME Act has no chance of becoming federal law in the short term due to domestic political complexity. But after a while you can probably agree on that.

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Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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