• President Joe Biden has proposed an excise tax on cryptocurrency mining companies that is 30% of the cost of the power they use.
• His Fiscal Year 2024 budget included a proposal to implement wash sale rules for crypto assets in order to close tax loopholes.
• The United States expects to impose the restrictions on cryptocurrency beginning 31 December 2023, with the country potentially earning around $24 billion from closing the lacunae.

Biden Proposes Excise Tax for Crypto Mining Companies

President Joe Biden has proposed an excise tax on cryptocurrency mining companies that is 30% of the cost of the power they use in order to address tax loopholes and reduce energy consumption.

Wash Sale Rules Proposed

The administration of U.S. President Joe Biden has proposed implementing wash sale rules for crypto assets in order to close tax loopholes, as part of his Fiscal Year 2024 budget proposal. Wash trading is the practice of selling a financial instrument for a loss in order to claim it as deductible and then immediately buying it back. Crypto traders can claim tax-deductible losses on losses and immediately repurchase tokens while stock and bond traders are prohibited from repurchasing the same securities for 30 days.

Impact on Environment & Local Utilities

The increase in energy consumption caused by digital asset mining has negative environmental consequences and may have implications for environmental justice, as well as raising energy prices for those that share an electricity grid. According to estimates, worldwide power usage for crypto assets is 120-240 billion kilowatt-hours per year— a fact that exceeds the annual electricity usage of Australia.

Restrictions Implemented Starting Dec 2023

The United States expects to impose restrictions on cryptocurrency beginning 31 December 2023, with the country potentially earning around $24 billion from closing such lacunae according to White House estimates.

Conclusion

In conclusion, President Joe Biden’s budget proposals aim at taxing crypto mining operations which are seen as having adverse environmental impacts and increasing prices for those sharing a grid with these operations while creating uncertainty and risks to local utilities and communities.