Coinspeaker
IMF Attacks Crypto Mining Industry Proposing 85% Electricity Price Surge
While Bitcoin mining industry made huge progress over the past years, the International Monetary Fund (IMF) continues to seek ways to put additional pressure on the mining industry. Two executives from the IMF recently stated that it would be good if the average cost of electricity used for crypto mining purposes is raised by 85%. The executives added that this measure would put a huge dent in carbon emissions.
The IMF Fiscal Affairs Department’s deputy division chief Shafik Hebous, and climate policy division economist Nate Vernon-Lin, proposed implementing a tax of $0.047 per kilowatt hour. On Thursday, August 15, the two IMF executives said that they “would drive the crypto mining industry to curb its emissions in line with global goals”. The pair stated that factoring in the local health impacts of mining would increase the tax to $0.089 per kilowatt hour.
Vernon-Lin and Hebous also said that the higher tax would increase the average electricity price for crypto miners by a staggering 85%. This will not only reduce emissions by 100 million tons annually but also boost the global government revenue by $5.2 billion.
For reference, the IMF executives said that a single Bitcoin transaction uses the same amount of electricity as used by an average person in Pakistan in three years. They further stated that AI models like ChatGPT use 10 times the power as compared to a Google search.
Thus, Vernon-Lin and Hebous also proposed bumping the energy use tax on AI data centers from $0.032 per kilowatt hour currently, rising to $0.052, by factoring pollution costs, as these centers are often situated in areas with greener electricity, according to IMF officials. This could potentially generate $18 billion in annual revenue for the governments.
IMF Crackdown on Crypto and AI
Last year in September 2023, IMF released a report stating that crypto mining could account for 0.7% of global carbon emissions by the year 2027. If emissions from the AI data centers are added, it could bring the total to 1.2% of the 450 million tons of emissions in total.
Photo: IMF
Hebous and Vernon-Lin believe that higher taxation might encourage AI data centers and crypto miners to use more energy-efficient equipment and thereby undertake less energy-intensive operations. The executives said that there would be global coordination on the tax “as stricter measures in one location could encourage relocation to jurisdictions with lower standards.”
While the IMF put pressure on the Bitcoin mining industry, former President Donald Trump has assured more help if he gets re-elected at the White House.
Countries like Venezuela have prohibited crypto mining due to the pressure it places on the power grid. Similarly, Iran has introduced a $24 reward for reporting illegal crypto miners as the nation grapples with a strained grid during an intense heatwave.
IMF Attacks Crypto Mining Industry Proposing 85% Electricity Price Surge
