The new debt ceiling deal has no mention of the 30% Digital Asset Mining Energy (DAME) tax.
Global markets have sighed a breath of relief over the past few days as US lawmakers reach an agreement in principle to avert a debt default. Earlier this month, the US Treasury warned that the US is likely to default on June 1 if Congress doesn’t suspend or increase the debt ceiling, leading to weeks of tense negotiations and bipartisan conflict.
The new deal suspends the debt ceiling entirely until 2025, enabling the US to continue borrowing money in order to pay its bills for the next two years without interfering with the 2024 presidential election.
Crypto enthusiasts will be pleased to learn that the new draft agreement does not impose any new taxes – most notably, the 30% crypto mining excise tax.
President Biden first introduced the tax in his 2024 federal budget. It was geared toward combatting the environmental damage caused by intensive crypto mining, and it was expected to raise $3.5 billion over 10 years.
On Twitter, Pierre Rochard, VP of Research at Riot Platforms, asked Warren Davidson if the crypto mining tax “is gone” on the basis that the draft agreement had no mention of it.
Davidson, who is the U.S. representative for Ohio, responded with a simple: “Yes, one of the victories is blocking proposed taxes.”
The DAME tax has been widely criticised since it was first proposed.
Some argued that the tax would drive miners out of the US into the “hands of Russia” and other offshore entities. Others were quick to point out that the tax didn’t really focus on mitigating environmental damage, because the same 30% rate applied to renewable and even off-grid energy sources.
Brian Quintenz, Head of Policy at a16z, said on Twitter: “So, apparently it doesn’t matter where the electricity comes from. If the government doesn’t like how you use the energy, you’ll be penalized.”
Cryptocurrency markets have responded positively to the news of a deal, with Bitcoin and Ether up by 2.5% and 2.9% respectively over the past seven days.
Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.