United States President Joe Biden has proposed a 30% tax on electricity used by crypto miners in his budget for 2025. The U.S. Department of the Treasury stated in a document that current laws do not cover digital assets besides broker and cash transaction reporting. To address this, the administration plans to impose an excise tax on digital asset mining, specifically targeting firms using computing resources for mining.

Under this proposal, crypto mining companies would need to report their electricity usage, whether self-generated or purchased externally. The tax would be levied at 30% of the electricity costs incurred in mining digital assets. The implementation would be phased, starting at 10% in the first year, 20% in the second year, and reaching 30% in the third year, effective for taxable years after Dec. 31, 2024.

Even companies using renewable energy sources like solar or wind power would be subject to this tax. Pierre Rochard, vice president of research at Bitcoin mining infrastructure firm Riot Platforms, believes this move aims to suppress Bitcoin and pave the way for a central bank digital currency (CBDC).

U.S. Senator Cynthia Lummis has spoken out against the proposed tax, arguing that while it signals the administration’s interest in crypto, a 30% tax could harm the industry’s growth in the United States. This isn’t the first time the Biden administration has introduced such a tax, as a similar proposal was made in the budget for 2024.

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