U.S. President Joe Biden has reintroduced the idea of imposing a 30% tax on electricity consumed by crypto miners in his 2025 budget proposal. According to a document from the U.S. Department of the Treasury, the administration aims to address the lack of regulations concerning digital assets beyond broker and cash transaction reporting.
The proposed excise tax would apply to firms engaged in digital asset mining, requiring them to pay 30% of the electricity costs used in mining activities. This tax would be phased in over three years, starting at 10% in the first year, then increasing to 20% in the second year, and finally reaching 30% in the third year.
The proposed tax would affect all crypto mining companies, including those that generate their own electricity through renewable sources like solar or wind power. Pierre Rochard, vice president of research at Bitcoin mining infrastructure firm Riot Platforms, sees this as an attempt to stifle Bitcoin and pave the way for a central bank digital currency (CBDC).
U.S. Senator Cynthia Lummis has expressed opposition to the tax proposal, suggesting that while the government’s inclusion of crypto in the budget signals bullish sentiment, a 30% tax would harm the industry’s growth in the United States.
This isn’t the first time the Biden administration has proposed such a tax. A similar attempt was made in the budget proposal for 2024, demonstrating ongoing regulatory efforts regarding crypto mining taxation.