While a significant portion of the online discourse surrounding the news indicated that the proposal was essentially “dead,” there were those who, like Nic Carter, co-founder of Coin Metrics, pointed out that it was only temporarily defeated. This alluded to the possibility of its inclusion in future bills.
Carter later suggested, in a Twitter thread on May 29, that the administration would likely try to discreetly incorporate it into some comprehensive bill, and they would have already done so if they had the necessary political support.
However, bills must go through both Congress and the House to become law. Considering that the Republican party generally opposes tax increases and currently controls the House, it seems unlikely that such a comprehensive bill would make it to the president’s desk.
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During a fireside chat at the Bitcoin 2023 conference in Miami on May 20, Senator Cynthia Lummis spoke with Perianne Boring, the founder and CEO of the Chamber of Digital Commerce. Lummis reassured viewers that the DAME tax would not come to fruition.
Lummis emphasized the importance of keeping Bitcoin mining firms in the U.S. for national security and energy stability. She highlighted how Bitcoin mining can help reduce gas flaring emissions and stabilize the energy grid.
Has the damage already been done?
“It is evident that this administration will continue to oppose the cryptocurrency sector broadly. Even if this specific tax proposal is no longer being considered, it is likely not the last misguided effort aimed at undermining this industry.”
Many individuals within the crypto industry, as well as some U.S. lawmakers, share this perspective. They argue that the U.S. government is making a coordinated attempt to discourage banks from engaging with crypto firms, commonly referred to as Choke Point 2.0. This effort is masked under the pretext of ensuring the stability and safety of the financial system.
When businesses make long-term decisions, they typically aim to mitigate risks. Therefore, when presented with a choice between operating in a region with clear and crypto-friendly policies or one with ambiguous regulations and a higher potential for policies that harm the competitiveness of U.S.-based activities, companies usually opt for the former.
Thiel emphasized the influence of the U.S. government and regulators on business decisions, stating in an interview with Cointelegraph, “Regardless of the likelihood of the DAME tax passing, Marathon has already started diversifying the locations of our operations.”
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He added that due to the uncertain regulations surrounding mining, his company made the strategic decision to expand its operations outside the U.S. rather than concentrating solely within the country.
Thiel cited his firm’s announcement on May 9, which revealed plans to construct two new mining facilities in Abu Dhabi. Abu Dhabi has actively sought to attract crypto-related investments through its clear and pro-market regulatory framework.
