The U.S. Treasury recently announced that it plans to impose a 30% tax on cryptocurrency mining operations. This move is part of the government’s efforts to regulate the crypto industry and make sure that it contributes to the country’s tax revenue. The tax will apply to all digital currencies that are mined, including Bitcoin and Ethereum, and will be levied on the profits earned from mining. This news has caused concern among the crypto community, as many fear that it will stifle innovation and make it harder for small-scale miners to compete with larger operations.
The U.S. government plans to implement a 30% excise tax on crypto mining operations, as per the budget proposal for 2024 announced by President Biden on March 9. Crypto mining firms will be required to report their electricity consumption amount and associated costs, with the tax calculated based on estimated electricity cost if the power source is off the grid. The tax proposal seeks to reduce crypto-mining activities due to environmental effects, electricity price hikes, and potential risks to communities. The excise tax will be implemented over a period of three years at a rate of 10% per annum, reaching 30% by 2026. The budget proposal also includes plans to increase the capital gains tax rate from 20% to 39.6% and to eliminate crypto wash sales. The U.S. expects to generate $24 billion from the crypto industry with these proposed tax changes. The crypto market has been experiencing a downward trend due to the ongoing Silvergate bank liquidation saga as per CoinGecko data.