The US government wants to impose a 30 percent tax on electricity used to mine cryptocurrency. According to the White House, this is necessary because crypto mining organizations are currently not paying for all the economic and environmental costs they impose on others.
These include the costs of environmental pollution, higher energy prices and the increased greenhouse gas emissions that cryptocurrency mining produces. “The Digital Asset Mining Energy Tax encourages companies to take greater account of the harm they cause to society,” the US government writes in a blog post.
According to the US, this high energy consumption leads, among other things, to higher electricity bills for surrounding consumers and overloaded equipment, which leads to server failures and ‘security risks’. In addition, local energy companies face financial risks if they decide to increase their capacity, as this may prove unnecessary if the crypto miners stop, the government said.
According to a study from The New York Times, cited by the Biden administration, the 34 largest crypto miners in the US used a combined 50 billion kWh of electricity last year. That is equivalent to the consumption of three million American households and is more than needed to power all PCs in the US. According to the newspaper, most crypto mining activity has taken place in the US since China restricted the mining of such currencies in 2021. Besides the fact that crypto mining requires a lot of electricity, the government states that it does not provide economic benefits, such as employment, unlike other sectors that use a lot of electricity.
The government wants the proposal to come into effect in the 2024 financial year. The DAME excise duty should be introduced gradually over a period of three years. The Biden administration expects this measure to raise $3.5 billion within ten years.
US electricity consumption in 2022