The Biden administration has reiterated its support for the proposed Digital Asset Mining Energy (DAME) tax, which would impose a 30% excise tax on the electricity consumed by cryptocurrency miners.
The White House’s Council of Economic Advisers (CEA) released a statement on May 2, 2023, supporting the tax and citing the negative environmental effects of crypto mining. The Council stated that the tax would hold mining companies accountable for the costs they impose on society, including environmental pollution, increased energy prices, and greenhouse gas emissions.
The Council cited reports indicating that crypto mining has negative effects on the environment and electricity grids, with pollution from electricity generation disproportionately affecting low-income neighborhoods and communities of color.
The White House Economic Advisors also pointed out that although crypto assets are virtual, the energy required to produce them through mining is tangible and comes with high costs. They argued that even if miners use clean power sources, the environmental impact of their operations persists, as they can drive up electricity costs and reduce the availability of clean energy for other purposes.
The renewed push for the DAME tax follows its proposal in President Joe Biden’s FY2024 budget in March 2023. However, stakeholders in the crypto industry, such as Dennis Porter, the CEO & Co-Founder of Satoshi Action Fund, have criticized the proposed tax. Porter argued that Bitcoin mining is beneficial for the grid and the environment and claimed that the tax could harm the industry and potentially benefit Russia.
#Bitcoin mining is good for the grid and good for the environment, yet Biden wants to tax it 30% and send this valuable industry into the hands of Russia.
— Dennis Porter (@Dennis_Porter_) May 2, 2023
The DAME tax is part of the Biden administration’s broader efforts to address climate change and reduce the carbon footprint of the cryptocurrency industry. The proposed tax is similar to existing carbon taxes that target industrial polluters to reduce greenhouse gas emissions. The tax would encourage miners to use more sustainable practices, such as renewable energy sources, to reduce the negative environmental impact of their operations.
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