IMF Proposes Heavy Taxes on Crypto Mining and Data Centers Due to High Energy Consumption
The International Monetary Fund (IMF) has published reports urging heavy taxation on cryptocurrency mining and data centers due to their significant energy consumption. In 2022, these activities accounted for 2% of global electricity usage and 1% of global carbon emissions, comparable to Japan’s consumption. By 2027, these figures are expected to rise to 3.5% of electricity usage and 1.2% of carbon emissions. The IMF proposes a tax of $0.047 per kWh on mining operations to reduce emissions by 100 million tons and generate $5.2 billion annually. For data centers, a tax of $0.032 per kWh is suggested, which could raise $18 billion yearly. The report also suggests coordinated carbon pricing and energy efficiency measures. However, Bitcoin ESG analyst Daniel Batten criticizes the IMF’s report for relying on outdated and unreliable data, claiming that Bitcoin mining positively impacts electric grids, unlike AI data centers.
Bearish
The news of the IMF proposing heavy taxes on cryptocurrency mining is likely to have a bearish impact on the market. The taxation could increase operational costs for mining activities, prompting miners to relocate or shut down, thereby impacting Bitcoin’s hash rate and network stability. History shows that regulatory pressures and increased costs often result in decreased investment interest and market value for cryptocurrencies in the short term. Over the long term, consistent imposition of such taxes could drive innovation toward energy efficiency but may also limit the growth potential of the crypto mining industry.