Biden’s New Crypto Tax Scheme Sends Bitcoin, Ethereum, and Dogecoin Reeling
Cryptocurrencies experienced losses on Thursday evening following US President Joe Biden’s proposal to possibly impose a 30% tax on electricity costs for crypto miners. Major cryptocurrencies such as Bitcoin and Ethereum fell by 7.94% and 7.42% respectively, with Dogecoin decreasing by 9%. The global crypto market capitalisation dropped by 6.68% in a day. The budget explainer paper released by the US Treasury Department stated that all firms using resources to mine digital assets for mining purposes would be subject to an excise tax amounting to 30% of the costs of electricity used. Cryptocurrency miners would also have to report the amount and type of electricity used as well as its overall value. In other news, the Federal Reserve’s top regulatory official, Michael Barr, highlighted the “potential transformative” effects of cryptocurrency technology on the financial system, but emphasised the need for “guardrails” to ensure these effects are realised. He cautioned that recent market turmoil surrounding crypto has illustrated the risks it could pose to traditional banks while noting that regulatory measures have been put in place to encourage caution.
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