The administration of U.S. President Joe Biden has proposed an excise tax on cryptocurrency mining companies that is 30% of the cost of the power they use, as well as eliminating tax-deductible losses associated with crypto token wash-trading, according to a U.S. Department of the Treasury’s document published on 9 March.

According to the Treasury Department, any company that uses computing resources, whether owned or borrowed, to mine digital assets will be subject to the 30% tax, which is expected to be implemented over three years in 10% annual stages, beginning 31 December this year.

The increase in energy consumption caused by the growth of digital asset mining has negative environmental consequences and may have implications for environmental justice, as well as raising energy prices for those that share an electricity grid.