In the United States, cryptocurrencies have been the focus of much attention by both federal and state governments, at the federal level, most of the focus has been at the administrative and agency level. State governments on the other side have proposed and/or passed laws affecting cryptocurrencies and blockchain technology, with most of the activity taking place in the legislative branch.
It is quite interesting to note here that there is a stark distinction among states, based on ideologies. The two parties in the US, the Democrats and the Republicans have extreme perspectives on cryptocurrencies and digital assets. The former on the one hand drafts legislation that is considered counterproductive for the expansion of crypto assets in the country. For example, recently, the Biden administration has proposed a 30% excise tax on the cost of powering crypto mining facilities, because of the total energy cost that miners consumed in mining cryptocurrencies. Also, Democrat-ruled states such as California, New York and Hawaii are considered the worst states for crypto assets because of high taxation and regulation. States such as Wyoming, Colorado Florida and Arizona ruled by Republicans are considered best for expansion of the crypto assets because of no or minimal taxation policies and easy regulations.
Recently, Montana, a Republican state, has ratified legislation protecting cryptocurrency mining and preventing local governments from prohibiting it. The law reads that digital asset mining provides positive economic value for individuals and companies throughout the United States. It has the potential to stabilize the grid and provide revenue for infrastructure upgrades statewide. It further mentions that the state aims to protect the right of individuals and businesses to mine digital assets and create legal certainty for the digital asset mining industry.
It aims at revising cryptocurrency laws, providing asset mining utility rates, prohibiting local government powers related to digital asset mining, prohibiting taxation on the use of cryptocurrency, using it as a payment method and providing for digital assets as personal property.
The legislation ratified, talks about the digital asset mining rate-making and mentions that the commission established for the purpose will not apply a rate classification for digital asset mining, digital asset mining businesses, or home digital asset mining that creates unduly discriminatory rates. Further, the law highlights that digital assets used as a method of payment will not be subject to any additional tax, withholding, assessment, or charge by the state or a local government that is based solely on the use of the digital asset as the method of payment.
The most important aspect of the legislation is the idea of the Right to mine digital assets, the legislation discloses that the various governing bodies in the state will not enact ordinance, resolution, or rule that imposes requirements on a digital asset mining business, prevent a digital asset mining business from operating in an area zoned for industrial use and prevents home digital asset mining at a private residence, except as related to existing noise ordinances.
It is important to note that, there are concerns about the environmental impact of cryptocurrency mining and the potential for excessive energy consumption, proponents argue that the benefits outweigh the costs, especially in terms of job creation and economic growth. This legislation is a win for the crypto ecosystem in extending its arms and avenues in the USA, a nation that is a bit skeptical about cryptocurrencies and related digital assets.
