The US proposes a tax on energy used for cryptocurrency mining

The new 2024 Revenue Proposal in the US will consider the progressive tax on electricity that is used for cryptocurrency mining. The US Department of the Treasure proposed a tax for energy used in mining of any digital asset, and defines digital assets as: ‘any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology (blockchain)’

Cryptocurrency mining is seen as a wasteful use of energy and the proposed tax would start from 10% in year one (2024), increasing to 30% in the two-year time. The environmental impact is the main reason behind the proposal as the document suggest that: ‘the increase in energy consumption attributable to the growth of digital asset mining has negative environmental effects and can have environmental justice implications as well as increase energy prices’

The instability of the mining operations is also stated as one of the reasons, as the mining industry follows the cheapest energy sources. ‘Digital asset mining also creates uncertainty and risks to local utilities and communities, as mining activity is highly variable and highly mobile.’