bitcoin (BTC) miners in the United States can breathe a sigh of relief after a proposed tax on crypto mining did not become a bill raise the US debt ceiling that seems place pass.
The Digital Asset Mining and Energy Excise (DAME) proposal sought to charge crypto miners a tax equal to 10% of the cost of the electricity they used for mining in 2024, before escalating to 30% in 2026.
The tax was highly controversial, with critics arguing that it had the potential to increase global emissions as a result of miners being forced to go abroad, where countries can produce more emissions during energy production.
In addition, Bitcoin miners are looking for cheap energy, and since one of the cheapest energy sources is excess renewable energy, Bitcoin miners can incentivize their production by providing utility companies with an energy buyer who, in Otherwise, it would be wasted.
The news broke after Bitcoin miner Riot Platforms VP of Research Pierre Rochard pointed out on May 28 that the proposed bill did not include any mention of the DAME tax, to which Rep. Warren Davidson he responded that it was "one of the victories" of the bill.
Yes, one of the victories is to block the proposed taxes.
—Warren Davidson (@WarrenDavidson) May 29, 2023
Dead and gone or ready to return?
While much of the online discussion of the news suggested that the proposal was "dead," others, such as Coin Metrics co-founder Nic Carter, noted that it was only temporarily rejected, hinting at the possibility of it being included in future bills.
"DAME" Tax on Bitcoin Mining Defeated (For Now)
Biden CEA, specifically Heather Boushey, hold this L https://t.co/hJgZ7oUGub
— nic carter (@nic__carter) May 29, 2023
Carter He suggested later, in a May 29 Twitter thread, the administration would probably try to sneak it into some blanket bill and would have done so already if it had the political coin to do so.
But bills must pass both Congress and the House, and given that the GOP generally opposes tax increases and currently controls the House, it seems unlikely that such a blanket bill would can get to the president's desk.
While speaking with the founder and CEO of the Digital Chamber of Commerce, Perianne Boring, during an informal chat on May 20 at the Bitcoin 2023 conference in Miami, Senator Cynthia Lummis sure viewers that the DAME tax "is not going to happen.
Lummis added that ensuring Bitcoin mining companies remain in the US was important for both national security and energy security, noting how Bitcoin mining can reduce emissions from flaring gas and help stabilize the power grid.
Cointelegraph contacted the White House to ask if it planned to continue with the DAME tax, but received no response.
The damage is already done?
In response to Cointelegraph's questions, Bitcoin miner Marathon Digital Holdings CEO Fred Thiel suggested that regardless of whether President Joe Biden's administration decides to continue applying the DAME tax, it will continue with its anti-crypto agenda, saying :
"I think it's clear that this administration will continue to be broadly opposed to the cryptocurrency sector, and even if this specific tax is no longer on the table, it likely won't be the last of a misguided and targeted effort to bring down this industry."
Many within the crypto industry and even some US lawmakers agree with this view, arguing that, among other measures, the US government is taking action. coordinated effort to discourage banks of working with cryptographic firms, also known as Choke Point 2.0, under the guise of ensuring that the financial system remains stable and secure.
When companies make long-term decisions, they generally seek to reduce risk. Thus, given the choice of operating in a region with clear, crypto-friendly policies versus one where regulations are unclear and there is greater potential for policies hurting the competitiveness of US-based activity. In the US, companies will generally choose the former.
Highlighting how the actions of the US government and regulators influence business decisions while speaking to Cointelegraph, Thiel said: “Regardless of the likelihood of DAME tax passage, Marathon has already begun to diversify the locations of our operations.” .
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Thiel added that “because the regulation around mining is so nebulous,” his company made a strategic decision not to concentrate its presence in the US, but to diversify its operations.
He pointed to a May 9 announcement from his firm, which said it would build two new mining facilities in Abu Dhabi.
Abu Dhabi is one region that has made a concerted effort to attract crypto-related investment through its clear regulatory regimewhich has been hailed as market friendly.
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