The United States Department of the Treasury has put forward a proposal to introduce a 30% tax on electricity consumption by mining companies.
The proposal is part of the projected revenue plan for the fiscal year 2025. For the Biden administration, the main objective is to mitigate the environmental impact resulting from mining activities.
According to the proposal, a tax on the electricity consumption of digital asset miners could reduce mining activity and the associated environmental damage.
Details of the tax plan
Under the proposed new tax plan, mining companies would be required to report both the quantity and the cost of the electricity they consume. This requirement also applies to companies that rely on off-grid energy sources.
The tax will be introduced gradually over the course of three years starting from January 1st, 2025: for the first year, an initial rate of 10% is planned, which will increase to 30% by the third year.
The first reactions
Senator Cynthia Lummis, notably supportive of digital assets, criticized the proposal, stating that it could hinder industry growth in the United States.
Pierre Rochard, Vice President of Research at the mining company Riot Platforms, argues that the tax aims to curb the spread of Bitcoin in favor of the development and introduction of a CBDC.
Previous attempts
The initiative is not the Biden administration’s first attempt to regulate the mining industry. As early as May 2023, the government had proposed the Energy Digital Asset Mining (DAME) Tax, citing concerns about environmental impact.
The “emergency” request, later suspended, by the EIA for the collection of data on electricity consumption by mining companies in the United States is just the latest in various attempts to curb the mining sector.
