Sen. Cynthia Lummis (R-Wyo.) called the Biden administration's plan to impose a 30% tax on bitcoin miners a “dangerous plan” and an “assault on innovation.”
She argued that such high taxes would stifle innovation and drive mining operations overseas, undermining both economic and national security interests.
She made the statement in a social media post on July 23, announcing that she had released an “Orange Paper” to refute Biden's “disastrous proposals.” The paper, titled “The Future of Bitcoin Mining: Strategic Considerations for the United States,” provides a detailed analysis of the economic, environmental, and regulatory aspects of Bitcoin mining.
Lammis has been a longtime crypto advocate and has also voiced concerns about the Biden administration's actions against DeFi protocols and non-custodial wallets, and has played a key role in pushing for crypto-related legislation.
Economic impact
Lammis' paper emphasized that Bitcoin mining can bring significant economic benefits, especially in rural and economically disadvantaged areas, creating high-paying jobs and stimulating local economies.
The paper cites successful mining operations in Texas, North Dakota and Kentucky and shows how these projects have revitalized local communities.
The paper also touches on environmental concerns and advocates for the use of renewable energy sources in Bitcoin mining. Lummis argued that with the right regulations and incentives, Bitcoin mining could transition to more sustainable energy practices.
The paper outlines strategies to minimize the environmental impact of mining activities, such as burning gases from oil fields and using hydroelectric power from existing dams. Ramis cited the examples of Iceland and Canada, which run the majority of their mining activities on renewable energy.
Regulatory and National Security Considerations
Much of the Orange paper focused on the regulatory landscape, with Lammis calling for clear, supportive regulation that encourages innovation while ensuring consumer protection.
She proposed a balanced approach to encourage the growth of the bitcoin mining industry without compromising environmental and financial stability. The paper suggested tax incentives for companies that use renewable energy, as well as stricter emissions standards for mining operations.
Lammis also discussed the national security implications of Bitcoin mining, suggesting that promoting domestic Bitcoin mining could reduce America's reliance on foreign powers and strengthen America's position in the global digital economy.
The document stressed the strategic importance of maintaining a robust and secure bitcoin mining infrastructure in the country to protect against potential cyber threats and ensure the integrity of the financial system.
Lammis called on policymakers, industry players, and the public to engage in a constructive dialogue about the future of Bitcoin mining to ensure the industry can continue to grow and innovate at a sustainable pace.
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