Cynthia Lummis recently released a report challenging the Biden administration’s proposal to impose a 30% excise tax on the energy consumed by Bitcoin miners. In her argument, Lummis raised concerns about the detrimental effects this tax could have on the growing Bitcoin mining industry in the United States. She criticized the administration for what she described as unfounded worries about environmental pollution and risks to the energy grid, emphasizing that the tax should be rejected regardless of the government’s motives.
Lummis warned that the implementation of such a tax could result in a mass exodus of Bitcoin mining operations to more favorable jurisdictions overseas. She pointed to the example of China’s ban on Bitcoin mining, where a significant portion of the industry either shut down or relocated. Given that energy constitutes the primary cost in Bitcoin mining, even minor tax increases could have devastating effects on the industry. Lummis argued that a blanket tax on Bitcoin mining in the U.S. could lead to economic losses and job opportunities for American communities.
Contrary to the administration’s claims that Bitcoin mining poses risks to local utilities and grid operations, Lummis contended that it can actually strengthen energy grids. She explained that miners have the ability to adjust energy usage dynamically to maintain a balance between supply and demand, thereby helping to prevent blackouts. In Texas, Bitcoin miners collaborated with ERCOT to stabilize the grid during peak demand, demonstrating their utility in managing energy resources effectively. Additionally, data from August 2023 suggested that Bitcoin miners contributed significantly to the interruptible load, equivalent to a quarter of all utility battery storage in the U.S. and Canada.
Lummis highlighted the sustainability efforts of Bitcoin mining operations, noting that a substantial portion of the energy consumed by miners is emission-free and trending towards improvement. She referenced a KPMG report that likened the energy usage of Bitcoin mining to common household appliances like tumble dryers, emphasizing that the industry is making strides towards cleaner energy sources. Moreover, she stressed the economic benefits of Bitcoin mining for underserved areas, noting that lawful American businesses in this sector contribute significantly to community development, particularly in rural or economically distressed regions.
The proposed excise tax on Bitcoin mining in the U.S. has sparked a heated debate, with Cynthia Lummis leading the opposition against it. She argues that the tax could have severe repercussions for the industry and its contributions to the economy and energy infrastructure. By highlighting the positive aspects of Bitcoin mining, Lummis makes a compelling case for reconsidering the proposed tax and instead allowing the industry to mature and continue its beneficial impact on American communities.
Leave a Reply