President Joe Biden’s proposed budget for fiscal 2025, unveiled this week, spans across various sectors of the American economy, with notable focus on new crypto-related taxes and regulations.

Among the proposed tax measures is an excise tax targeting cryptocurrency mining operations. Under this plan, firms engaged in mining digital assets using computing resources, whether self-owned or leased, would face a 30% excise tax on the electricity costs incurred during mining activities. The tax would be phased in over three years, starting at 10% in the first year, increasing to 20% in the second year, and reaching the full 30% in the third year.

The Treasury Department highlights concerns about the environmental impact of increased energy consumption due to digital asset mining, emphasizing negative effects on the environment and energy prices, as well as potential risks to local utilities and communities.

Additionally, the budget proposal addresses wash trading, a form of market manipulation common in cryptocurrency trading. The plan aims to eliminate tax subsidies for cryptocurrencies by updating anti-abuse rules in the tax code to include crypto assets, similar to stocks and securities. This adjustment would restrict tax benefits associated with wash trading unless the asset is sold and not repurchased within 30 days.

The Biden administration anticipates significant revenue generation from these measures, estimating $302 million in the first year and $7.7 billion over the next decade from the excise tax, and nearly $26 billion over the next decade from the wash trading rule.

However, the proposed budget has faced opposition from Republicans, with Speaker of the House Mike Johnson criticizing it for excessive spending and fiscal irresponsibility. The budgetary process is often contentious and subject to revisions before final approval, leaving room for potential adjustments to crypto regulations. Ultimately, the fate of these proposals remains uncertain until the final budget is passed.