White House advisers renew push for 30% digital mining energy tax

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The Biden administration has renewed its push for a 30% Digital Asset Mining Energy (DAME) tax on cryptocurrency miners, as part of efforts to minimize the industry’s alleged impact on climate change.

The proposed crypto mining tax was first announced on March 9 and aims to impose a graduated 30% excise tax on electricity used by crypto miners.

An excise tax on electricity consumption by digital asset miners could reduce mining activity and its associated environmental impacts and other harms, the Treasury Department wrote at the time. Bitcoin (BTC) fell below $20,000 just a day later.

However, a May 2 statement from the White House Council of Economic Advisers (CEA) brought the proposal back into the spotlight, attempting to justify the need for the new tax.

Currently, cryptomining companies don’t have to pay 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. greenhouse effect on the climate, wrote the CEA.

The DAME tax prompts companies to start taking better account of the damage they inflict on society, he writes, adding:

While crypto-assets are virtual, the energy consumption associated with their computationally intensive production is very real and imposes very real costs.

The blog also referenced reports suggesting that crypto mining has negative impacts on the environment, quality of life and power grids and that pollution from power generation falls on low-income neighborhoods. income and communities of color, while increasing the cost of electricity for consumers.

Related: Biden Budget Proposes 30% Tax on Crypto Mining Electricity Use

This even suggests that cryptocurrency mining using existing clean energy (such as hydroelectricity) may still have a negative impact on the environment, by pushing other electricity users towards alternative sources of electricity. dirtier.

Screenshot of CEA’s discussion thread on the environmental impact of cryptocurrency mining. Source: Twitter

The Twitter thread posted by the Council of Economic Advisers drew widespread criticism from the community, with some calling it misinformation and propaganda while one Twitter user argued that such a tax would simply push the mining of Bitcoin to Russia and other countries.

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