The Digital Asset Mining Energy (DAME) excise tax, a proposed 30% tax on energy costs for cryptocurrency miners, was not included in the latest Fiscal Responsibility bill aimed at tackling the Debt Ceiling crisis. The tax drew widespread criticism from stakeholders within the crypto-mining sector and U.S. lawmakers. The news of the omission has been widely celebrated on Crypto Twitter as a victory for the broader crypto industry. U.S. Congressman Warren Davidson confirmed the absence of the DAME tax in the debt ceiling bill and revealed “one of the victories is blocking proposed taxes” on Twitter. Cryptocurrency markets responded favorably to this development, with Bitcoin showing a 7% increase before Monday trading.
Background of the DAME Tax
The DAME excise tax proposal was first introduced on May 2, 2023, aimed at addressing the energy consumption associated with digital asset mining. According to the Department of the Treasury, this increased energy consumption has adverse environmental effects, can increase energy prices for those sharing an electricity grid with digital asset miners, and can pose risks to local utilities and communities. However, the tax faced strong opposition from crypto advocates and several U.S. lawmakers, including 2024 Presidential candidate Robert Kennedy Jr. and Senator Cynthia Lummis voiced their strong opposition, with Lummis pledging to prevent President Biden from taxing the digital asset industry out of existence.
What Does This Mean for the Crypto Industry?
Removing the DAME tax from the debt ceiling bill does not mean the debate surrounding energy costs and cryptocurrency mining ends. It is still uncertain whether a similar tax proposal might be reintroduced in a future bill. Furthermore, it remains unclear how future discussions might influence the cryptocurrency industry in the U.S. While removing the proposed DAME tax is undoubtedly a victory for crypto miners, the ongoing uncertainty surrounding future legislation may pose challenges.
Other Provisions in the Fiscal Responsibility Act of 2023
The latest version of the debt ceiling bill, known as the “Fiscal Responsibility Act of 2023,” includes various other provisions, as reported by NYMag. These include a two-year extension of the debt ceiling, non-enforceable funding targets for future years, and specific changes to SNAP food assistance and Temporary Assistance for Needy Families (TANF) programs.
The omission of the DAME tax from the latest Fiscal Responsibility bill is a significant development for the crypto industry. While it is a victory for crypto miners, the ongoing uncertainty surrounding future legislation may pose challenges. It remains to be seen how these new developments will impact the broader crypto industry, and whether a similar tax proposal might be reintroduced in a future bill.