The Biden administration has proposed an excise tax on cryptocurrency mining to address energy consumption concerns and promote environmental sustainability amid the growth of digital asset mining. Under the proposal, organizations engaged in digital asset mining would face a 30% excise tax based on their utility costs incurred during mining operations. If passed into law, miners would need to disclose their total electricity consumption during mining for taxation purposes.

The proposal is now subject to a vote in Congress, which has the authority to impose taxes. The outcome remains uncertain at this stage. If implemented, miners would be required to report their total power consumption during mining, which would be subject to taxation. Additionally, miners would incur a transfer of assets tax when selling the tokens acquired through mining. This tax is expected to be phased in over three years, starting at 10% in the first year, increasing to 20% in the second year, and reaching 30% in the third year.

Projections by the White House estimate that the tax could generate $302 million in its first year and approximately $7.7 billion over the next decade. Similar to India's approach, which imposes a 30% tax on cryptocurrency trading, the US proposal to tax cryptocurrencies as tangible property provides an additional means to enforce anti-money laundering regulations.

While some cryptocurrency enthusiasts may oppose taxation, the US government allows exemptions for cryptocurrency losses, such as those due to fraud or theft of private keys. Additionally, the proposed 'wash sale rule' aims to crack down on wash trading, an illicit practice involving rapid buying and selling of identical securities to manipulate market information, typically to exploit crypto tax losses.