In a potentially significant development for the cryptocurrency mining community, a tentative deal aimed at avoiding a US government default on its debts includes the removal of a controversial tax on the energy consumption of crypto miners.
Ohio Representative Warren Davidson revealed that the proposed agreement, recently unveiled by US lawmakers, addresses the pressing issue of the debt ceiling and suspends it for two years. This would allow the government to continue borrowing money and meeting its financial obligations.
Of particular interest to the crypto community is the absence of specific tax increases targeting corporations and high-income individuals in the latest draft of the bill. This omission effectively eliminates the White House’s plans to impose heavy taxes on the bitcoin mining sector.
The proposed tax on digital asset mining, known as the Digital Asset Mining Energy (DAME) tax, was initially put forward in March 2023. It aimed to apply to both proof-of-work (PoW) and proof-of-stake (PoS) networks, disregarding the differences in their energy consumption levels.
The Biden administration argued that a 30% tax on crypto mining companies was necessary to address the environmental and societal impact of mining activities. However, if the bill is passed, the DAME tax will no longer be enforced.
The cryptocurrency community is hopeful that this development will remove a major obstacle for bitcoin miners and create a favorable environment for continued growth and innovation in the industry.
The legislative body is scheduled to vote on the proposed legislation on May 31, which will play a crucial role in determining the fate of the debt ceiling and its implications for the cryptocurrency industry.