Bitcoin (BTC) miners in the U.S. can breathe a sigh of relief after a proposed crypto mining tax didn’t make it through a bill to raise the mining cap. the American debt which seems together pass.
The Digital Assets Mining Energy (DAME) excise tax proposal aimed to charge crypto miners a tax equal to 10% of the cost of the electricity they used for mining in 2024, before rising to 30 % in 2026.
The tax was highly controversial, with critics saying it had the potential to increase global emissions due to the fact that miners were forced to go overseas where countries could produce more emissions when producing of energy.
Additionally, bitcoin miners crave cheap energy, and since one of the cheapest sources of energy is excess renewable energy, bitcoin miners can actually encourage its production by supplying utilities. a buyer for energy that would otherwise be wasted.
The news broke after Bitcoin miner Riot Platforms VP of Research Pierre Rochard noted on May 28 that the proposed bill made no mention of the DAME tax, which Rep. Warren Davidson responded as “one of the victories” of the bill.
Yes, one of the victories is the blocking of proposed taxes.
—Warren Davidson (@WarrenDavidson) May 29, 2023
Dead and buried or ready to return?
While much of the online discussion around the news suggested the proposal was “dead,” others, like Coin Metrics co-founder Nic Carter, pointed out that it hadn’t been. only temporarily rejected, hinting at the possibility of it being included in future bills.
The “DAME” tax on Bitcoin mining is defeated (for now)
Biden CEA, especially Heather Boushey, holds this L https://t.co/hJgZ7oUGub
– nic carter (@nic__carter) May 29, 2023
Carter suggested later in a May 29 Twitter thread, the administration would likely attempt to introduce it into an omnibus bill and would have already done so if it had the political currency to do so.
But the bills must pass both Congress and the House, and given that the Republican Party is generally opposed to tax increases and currently controls the House, such a bill seems unlikely. omnibus can arrive at the president’s office.
While addressing Chamber of Digital Commerce Founder and CEO Perianne Boring in a fireside chat on May 20 at the Bitcoin 2023 conference in Miami, Senator Cynthia Lummis insured viewers that the DAME tax “won’t happen”.
Lummis added that ensuring bitcoin mining companies stay in the United States is important for national security and energy security, highlighting how bitcoin mining can both reduce flaring emissions from gas and help stabilize the energy grid.
Cointelegraph contacted the White House to ask if it planned to pursue the DAME tax, but received no response.
Is the damage already done?
In response to questions from Cointelegraph, Fred Thiel, CEO of Bitcoin miner Marathon Digital Holdings, suggested that whether or not President Joe Biden’s administration decides to pursue the DAME tax, it will continue with its anti-crypto agenda, by saying:
“I think it’s clear that this administration will continue to oppose the crypto industry broadly, and while this specific tax is no longer on the table, it’s likely not the last of the misguided and targeted efforts. to bring down this industry.”
Many in the crypto industry and even some US lawmakers agree with the move, arguing that, among other measures, the US government is making a coordinated effort to discourage banks from working with crypto firms – aka Choke Point 2.0 – under the guise of ensuring the financial system remains stable and secure.
When companies make long-term decisions, they generally seek to reduce risk. So, given the choice to operate in a region with clear, crypto-friendly policies versus a region where the regulations are unclear, and there is a greater potential for policies that harm the competitiveness of US-based business, companies will generally choose the former.
Thiel highlighted how the actions of the US government and regulators are weighing on trading decisions while speaking to Cointelegraph, saying, “Regardless of the likelihood of the DAME tax passing, Marathon has already begun to diversify the locations of our operations.”
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Thiel added that “with the regulations around mining being so nebulous”, his company made the strategic decision not to concentrate its footprint in the United States, but rather to diversify its operations.
He pointed to a May 9 announcement from his company, which said it would build two new mining facilities in Abu Dhabi.
Abu Dhabi is one region that has made a concerted effort to attract crypto-related investment via its clear regulatory regime, which has been hailed as market-friendly.
