Bitcoin (BTC) miners in the United States can breathe a sigh of relief after the proposed crypto mining tax did not make it into a bill to raise the US debt ceiling. set to pass.
The Digital Assets Mining Energy (DAME) excise tax proposal seeks to charge crypto miners a tax equal to 10% of the cost of the electricity they use to mine by 2024, before rising to 30% in 2026.
The tax is highly controversial, with critics arguing that it has the potential to increase global emissions as a result of miners being forced to go overseas where countries may produce more emissions during production. of energy.
In addition, Bitcoin miners are looking for cheap energy, and as one of the cheapest sources of energy is excess renewable energy, Bitcoin miners can actually stimulate its production by providing utilities to a buyer for of energy that would have been wasted.
The news broke after Bitcoin miner Riot Platforms vice president of research Pierre Rochard noted on May 28 that the proposed bill does not include any mention of the DAME tax, to which Representative Warren Davidson responded that “one of the victories ” in the bill.
Yes, one of the victories was the blocking of the proposed tax.
— Warren Davidson (@WarrenDavidson) May 29, 2023
Dead and buried or destined to return?
While much of the online discussion around the news suggested the proposal was “dead,” others, like Coin Metrics co-founder Nic Carter, emphasized that it was only temporarily defeated, referring to the possibility that it would be included in future payments.
Bitcoin mining “DAME” tax defeated (for now)
Biden CEA, especially Heather Boushey, holds this L https://t.co/hJgZ7oUGub
— nic carter (@nic__carter) May 29, 2023
Carter proposed later in a May 29 Twitter thread that the administration would probably try to sneak it into some omnibus bill and would have done so if it had the political money to do so.
But the bills need to be passed by Congress and the House, and considering that the Republican party is generally opposed to raising taxes and currently controls the House, it seems unlikely that the omnibus bill will make it to the president’s desk.
While speaking with Chamber of Digital Commerce founder and CEO Perianne Boring during a May 20 fireside chat at the Bitcoin 2023 conference in Miami, Senator Cynthia Lummis assured the audience that the DAME tax is “not going to happen.”
Lummis added that making sure Bitcoin mining companies stay in the US is important for national security and energy security, highlighting how Bitcoin mining can both reduce gas flaring emissions and help stabilize on the energy grid.
Cointelegraph contacted the White House asking if it plans to continue pursuing the DAME tax but did not receive a response.
Has the damage been done?
In response to questions from Cointelegraph, Bitcoin miner Marathon Digital Holdings CEO Fred Thiel suggested that, even if President Joe Biden’s administration decides to continue pursuing the DAME tax, it will continue its anti-crypto agenda. , which says:
“I think it’s clear that this administration will continue to broadly oppose the crypto sector, and while this specific tax is off the table, it likely won’t be the end of its misguided, targeted efforts to undermine this industry. .”
Many from within the crypto industry and even some US lawmakers agree with this takeover, arguing that, among other measures, the US government is making a coordinated effort to prevent banks from working of crypto firms – aka Choke Point 2.0 – under the guise of the financial system remains stable and safe.
When businesses make long-term decisions, they often seek to reduce risk. Therefore, given the choice to operate in a region with clear, crypto-friendly policies compared to one where regulations are unclear, and there is greater potential for policies that harm competition in US-based activity, companies generally choose the former.
Thiel emphasized how the actions of the US government and regulators are weighing on business decisions while talking to Cointelegraph, saying, “Regardless of the likelihood of the DAME tax being passed, the Marathon has already begun to diversifying the locations of our operations.”
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Thiel added that “with the regulatory environment around mining less clear,” his company made the strategic decision not to focus its footprint on the US but to split 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 a region that has made a concerted effort to attract crypto-related investment through a clear regulatory regime, recognized as pro-market.