The recent deal that resolved the US debt ceiling battle in Washington, D.C. has raised questions regarding the implications for the crypto industry. Interestingly, the initial version of the deal doesn’t mention “crypto” or “cryptocurrencies.” This is somewhat surprising, as one might have expected proposals like the Digital Asset Mining Energy (DAME) excise tax, which aimed to levy a 30% tax on firms using computing resources to mine digital assets.
The DAME tax was not included in the debt deal, indicating that the omission is positive for the crypto industry. The tax proposal stemmed from concerns about the consumption of fossil fuels in mining and the subsequent environmental harm. However, the debt ceiling agreement has an indirect benefit for fossil fuel advocates, as it includes a provision for the expedited completion of a natural gas pipeline between West Virginia and Virginia (the Mountain Valley Pipeline).
At first glance, this provision may be a positive for Bitcoin miners, since some of them use excess natural gas as an energy source. In fact, several miners have set up operations near the Marcellus and Utica shale gas fields for this very reason.
Although this could be viewed as an unintentional indirect benefit, cryptocurrencies like Bitcoin and Ether (ETH) have been reacting favorably to the agreement. Price increases ranked 10th in daily moves for 2023 should be attributed to factors such as increased certainty and relief that nothing antagonistic towards crypto was included.
However, there are questions regarding the consequences of the debt ceiling agreement. One concern is the growing presence of crypto in the political realm. While the exclusion of the crypto mining tax may give the current administration the freedom to claim they took no negative action against Bitcoin, it still leaves room for the issue to resurface.
Crypto currencies have the potential to become a political football in the future, with supporters on both sides of the political divide. For now, though, the recent debt deal seems to have skirted around crypto, offering a reprieve for the industry.
As we look ahead, it will be important to monitor who says what about crypto assets in the political realm. The recent debt deal may have sidestepped the crypto industry for the time being, but regulations and proposals could still emerge as hot topics in the future.
In conclusion, the US debt ceiling deal appears to be a mixed blessing for the crypto industry. While it avoids potentially damaging proposals like the DAME tax, it also offers no clear direction on the future regulation of cryptocurrencies. Keeping a close eye on political developments will be crucial to understanding where things might head next in the crypto space.
Source: Coindesk
