Government wants 30 percent tax on electricity for digital assets mining

The government wants to impose a 30 percent tax on electricity used for mining cryptocurrency. According to the White House, this is necessary because crypto mining organizations currently do not pay 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 causes.

“The digital asset mining Energy tax encourages companies to be more mindful of the damage they are causing to society,” the US government writes in a blog post.

According to the US, this high energy consumption leads 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 that may prove unnecessary if the crypto miners stop doing so, the government said.

According to a study by 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 equates to the consumption of three million American households and is more than it takes to power all PCs in the US. According to the newspaper, most of the crypto mining activity has taken place in the US since China curtailed the mining of such currencies in 2021. In addition to the fact that crypto mining requires a lot of electricity, the government argues that it does not bring economic benefits, such as employment, unlike other sectors that consume a lot of electricity.