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Biden administration plans to impose 30% electricity tax on mining companies

Mining: Biden administration plans to impose 30% electricity tax on mining companies

The administration of US President John Biden has initiated the introduction of a 30 percent tax on electricity from mining companies.

According to Rochard, the Biden administration's goal is that the tax will "limit the spread of bitcoin in the United States and introduce a central bank digital currency (#CBDC)." At the same time, experts have concluded that taxing mining companies is unlikely.

Incidentally, in January 2024, US politician Donald Trump announced his intention to ban the creation of CBDC if he is #elected US President, and on February 26, 2024, a #legislative bill "against the oversight of central bank digital currencies" was introduced in the US Senate by a faction of Republicans opposed to the adoption of such a means of payment. The bill "opposing central bank digital currency oversight" was introduced by a group of Republicans who oppose the adoption of such a means of payment.

"A General Explanation of Revenue Proposals" emphasizes the lack of regulation of digital assets other than disclosure of securities and monetary transactions. As a result, the administration is leaning toward taxing mining activities.

According to the document, "companies that use computing resources owned or leased from outside sources to mine digital assets would be subject to an excise tax equal to 30% of the cost of electricity incurred in the mining process."

Thus, mining companies will have to disclose the type and quantity of electricity consumed. If the budget is approved, the directive will come into force after December 31, 2024.

The tax will be introduced in three phases: 10% in the first year, 20% in the second year and 30% in the third year. It is noted that the tax will also affect mining companies that generate electricity.

US Senator Cynthia Lummis criticized Biden's proposal. While she said that including cryptocurrencies in the national budget is a positive thing, she believes that a 30 percent levy could cripple the sector.

This move by Gov. Joe Biden to impose a 30 percent energy #tax is not without precedent. In March 2023, a similar attempt was made to tax mining companies.

A statement released by the Texas Blockchain Council (TBC) in February said that the U.S. government is attempting to "limit or eradicate" the mining sector by collecting data on companies' electricity consumption.

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