U.S. congressman says crypto mining tax scrapped in debt ceiling deal

A proposed tax on electricity used by cryptocurrency miners in the U.S. has been scrapped in the deal between U.S. President Joe Biden and House Speaker Kevin McCarthy to raise the country’s debt ceiling, according to Republican congressman Warren Davidson.

Fast facts

• Davidson on Sunday tweeted a link to the “Fiscal Responsibility Act of 2023,” a draft bill that would allow the U.S. to raise the debt ceiling to prevent a national default.
• Davidson said in a following tweet the bill didn’t include a tax on cryptocurrency miners equal to 30% of the cost of the power they use – a levy the Biden administration has been campaigning for.
• “Yes, one of the victories is blocking proposed taxes,” Davidson tweeted, in response to a separate tweet from Pierre Rochard, vice president of research at Bitcoin mining firm Riot Platforms, who asked for confirmation that the energy excise tax had been ditched.

Yes, one of the victories is blocking proposed taxes.

— Warren Davidson 🇺🇸 (@WarrenDavidson) May 29, 2023

• In March, the Biden administration proposed the “Digital Asset Mining Energy excise tax” as part of this year’s budget from the U.S. Treasury Department, citing what it calls “negative spillovers” from the industry.
• While the tax was seen as a clear down arrow for the industry, shares in listed crypto miners in the U.S. have bounced back since as the price of Bitcoin itself surged more than 65% this year, offsetting the tax concerns.
• Shares of Riot Platforms on Nasdaq have risen 77.8% since March 1, while Marathon Digital Holdings have climbed 37.2% in the same period, indicating they may have further to run with the tax threat removed.
• In addition, some U.S. states have rolled out a welcome mat for crypto miners. In April, Arkansas joined Montana and Texas to propose legislation to ensure the businesses of Bitcoin mining firms were protected under the law.
• U.S. lawmakers are expected to vote on the debt ceiling deal on May 31.