The revelation from the US Congress that companies that provide mining services for cryptocurrencies will not be taxed according to the electricity used gave companies such as RIOT and Argo a sigh of relief.
The US did not include a tax requirement for cryptocurrencies in the bill
Debates on the debt ceiling have been going on for weeks in the USA. As we quoted as Kriptokoin.com, on May 28, President Joe Biden said that the debt ceiling is “an important step in reducing spending”.
In the hot development, it was revealed that the relevant draft law did not include an article that would impose a 30% tax on mining companies. RIOT mining company manager Pierre Rochard gave the good news by referring to Samuel Armes on Twitter.
https://twitter.com/samuelarmes/status/1663271057686405125
Meanwhile, the crypto market started the week in the green after the White House announced that it had reached an agreement to avoid a debt ceiling crisis. Bitcoin and ETH rose to $28,249 and $1,917, respectively, on the first day of the week. The impending debt ceiling crisis was putting a heavy burden on cryptocurrencies. Therefore, Bitcoin is still down 2.8% from last month.
Joe DiPasquale, CEO of crypto fund manager BitBull Capital, said, “Bitcoin has found support around $25,000. It consolidated for about two weeks before rebounding on Monday. We’ll see if this move continues up to $30,000. But we expect the market leader to test this key resistance once again in the near term.” BTC is trading slightly below $28,000 again on Tuesday.
Ohio lawmaker explains why no taxes
According to Ohio Representative Warren Davidson, an interim agreement aimed at preventing the US government from defaulting on its debts has eliminated the proposed tax on energy use by cryptocurrency miners.
On May 28, after negotiations, US lawmakers released a draft bill that would allow the government to raise the debt ceiling. The debt ceiling is a limit applied to the amount of debt the Treasury Department can incur. It still needs congressional approval for the border to remain.
https://twitter.com/WarrenDavidson/status/1662994140844400640
According to the proposed bill, the debt ceiling will be suspended for two years. Thus, the US government will be allowed to continue borrowing and paying off its debts. President Biden reportedly wants the deal to include certain tax increases for corporations and high-income individuals. But the latest draft suggests this is highly unlikely.
On May 28, Davidson said the bill avoids all “taxes”, including a 30% tax on electricity used by miners. Had it passed, miners would have been subject to a 10% tax increase each year for three years from 2024.
What’s next?
In the coming hours, members of Congress will meet again in the House of Representatives on the Debt Limit issue. This proposal was met with a reaction, especially by crypto money supporters. However, experts state that there will be no problems with the debt limit. While some Republican members are still not convinced, the bill is expected to be presented to Congress tomorrow at the earliest.
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