Recent news regarding the cryptocurrency industry in the United States are not encouraging. The latest is the 2024 budget proposal presented by the Biden administration. Indeed, the US president recently unveiled a plan that requires crypto businesses to pay a portion of their revenue to the regulatory agency. In addition, mining operators will be subject to a 30% tax on the electricity used. This tax will be phased in over a period of three years. This proposal has raised concerns about its potential impact on the cryptocurrency industry in the United States…
Mining farms targeted by new tax proposal
The US Treasury Department announced on Thursday, March 9, a proposal to introduce a 30% tax on the cost of energy consumption of mining farms. According to the paper of the US Treasury, the government plans to introduce progressive taxation against crypto mining established on its territory, whether or not they rent computer resources.
Under this proposal, these companies would be required to provide detailed reports on their energy consumption and the type of electricity used. Although this proposal has yet to be voted on, it raises concerns about its potential impact on the cryptocurrency mining industry in the United States.
Crypto companies operating in the United States face multiple challenges, including the crackdown by the SEC and now by the President. If this trend continues, they will have to take measures to adapt to the political environment of the Biden government. The new plan emanating from the US Treasury is clearly intended to hinder crypto mining activities on its soil. However, this plan could have a mixed impact, given that the value of bitcoin is already experiencing a significant decline.
The increase in energy consumption due to the growth of digital asset mining has negative environmental effects. It may also have environmental justice implications as well as increase energy prices for those who share an electricity grid with digital asset miners.
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US tax measures threaten the crypto industry
The government of Biden proposed a budget that includes measures that have had negative impacts on the crypto market. In addition to the 30% tax, a new 25% tax on unrealized profits of cryptocurrency businesses is also being considered. Similarly, the capital gains tax would rise from 20% to 39.6%, making it the highest in the world.
The goal of the measures is to reduce the budget deficit by more than $3 trillion over the next 10 years, a concern for Biden as he prepares for the upcoming election.
However, Republicans have yet to participate in the vote to include Biden’s plan in the budget before it is implemented. It is therefore possible that amendments will be proposed to modify the proposal and reduce its impact on the cryptocurrency industry.
While the crypto sector is in troubled times with Silvergate Bank and the risk of USDC blast, a new threat now hovers. The miners victory in the country seems to have been short…
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
