IMF demands global tax increase for Bitcoin mining

To raise government revenues and achieve global climate goals, the IMF demands a global tax increase on mining companies. An environmentalist for Bitcoin out of his worries.

The International Monetary Fund (IMF) believes an increase in the electricity tax for mining companies would reduce the environmental burden and could give governments billions of dollars in tax revenue.

"Such a tax would generate $5.2 billion in annual government revenue worldwide and reduce annual emissions by 100 million tons, roughly equivalent to Belgium's current emissions," reads a blog post.

The IMF aims to promote global financial stability, such as through financial aid or advice. When El Salvador adopted the Bitcoin standard in 2021, the IMF strongly warned against the cryptocurrency.

Recent declared the organization, "While many of the risks related to Bitcoin have not yet occurred, there is agreement that more efforts are needed to increase transparency and reduce potential risks to fiscal and financial stability from the Bitcoin project [in El Salvador]."

Anyway: The wallet address of the first Bitcoin nation is transparently viewable. Currently, El Salvador's Bitcoin purchases stand at a 33% gain. The political situation in the Pacific coast country is also significantly better than Western countries.

Regarding Bitcoin mining, the IMF expressed concerns: By 2027, the industry could produce 0.7% of global CO2 emissions. A "direct tax of $0.047 per kilowatt-hour on power consumed by miners could significantly reduce emissions and bring the industry in line with global climate goals."

The White House also approved a plan to tax the US mining industry in March 2023, which was ultimately thwarted by Republicans.

Whether governments will respond to the IMF's demands remains to be seen. But: If governments implement such a tax increase, mining companies could move to cheaper countries, which would lose revenue, jobs and network stability.

Bitcoin environmentalist Daniel Batten criticizes the IMF's blog post. According to him, the organization relies on outdated data and discredited analysis.