Bitrabo Editorial
Bitcoin mining has been in the spotlight lately, as it may be a potential beneficiary in an important negotiation. Ohio Rep. Warren Davidson has revealed that a provisional deal that aims to halt the United States government from defaulting on its debts may bring relief to cryptocurrency miners.
The anticipated agreement is expected to do away with the proposed tax on the energy consumption of these miners. This is a promising sign for the cryptocurrency industry, as it may remove a significant obstacle for Bitcoin miners and make way for continued growth and innovation in the industry.
Bill Introduced To Suspend US Debt Ceiling
In recent news, US lawmakers presented a preliminary draft of a bill that aims to tackle the pressing issue of the debt ceiling, which limits the amount of money that the government can borrow to meet its financial obligations. The bill comes after intense negotiations that involved US President Joe Biden and House Speaker Kevin McCarthy.
If the suggested legislation is passed, it would result in the two-year suspension of the debt ceiling, allowing the US government to continue borrowing money and fulfilling its financial commitments.
Biden had initially suggested that the bill include provisions for tax increases aimed at corporations and high-income individuals. However, the most recent draft indicates that these specific tax hikes are unlikely to be part of the final version of the bill. The absence of such tax increases could be seen as a compromise made to gain broader support for the legislation.
BTCUSD backpedals to the $27K territory today. Chart: TradingView.com
Bitcoin Mining DAME Tax No More?
As a result of Biden’s and top Republicans’ agreement to prevent the US from defaulting on its debt, the White House’s proposal to impose heavy taxes on the Bitcoin mining sector appears to be abandoned.
Davidson stated on Sunday that the mining tax will not be implemented, although the White House has not provided any new updates on the tax idea.
For his part, Pierre Rochard, Vice President of Research at Riot Platforms, took to Twitter to voice concerns about the draft bill that’s titled the “Fiscal Responsibility 5 Act of 2023” not mentioning Bitcoin mining.
Rochard’s tweet questioned whether this meant that the proposed Administration’s Digital Asset Mining Energy (DAME) excise tax proposal was discarded.
Davidson tweeted in response, stating that one of the accomplishments was the prevention of proposed taxes on crypto.
Yes, one of the victories is blocking proposed taxes.
— Warren Davidson (@WarrenDavidson) May 29, 2023
30% Crypto Tax Undecided
The concept of implementing an energy tax for digital asset mining was first introduced in March of this year. The DAME tax was meant to affect both Proof-of-Work (PoW) networks like Bitcoin and Proof-of-Stake (PoS) networks like Ethereum, while discounting their substantial differences in energy consumption levels.
The Biden administration asserted that a 30% tax on cryptocurrency mining companies was necessary to decrease environmental and societal harms caused by crypto mining activities, and if the bill were to pass, the tax would be imposed.
The legislative body is supposed to convene and cast their votes on the proposed legislation on May 31.
-Featured image from Getty