Mawson Makes A Crucial Contribution To Senate Inquiry On The Regulation Of Crypto And Digital Assets

How the tax break will effect miners

In its recent report, the Senate Committee on Australia as a Technology and Financial Center (ATFC) has made a series of recommendations that will provide greater regulation for digital assets in Australia. One of the most significant recommendations is a tax discount for crypto miners who use renewable energy – something that Mawson is already committed to as we launch our first site in the country that will be powered by 100% renewable energy.

What Does the Committee Recommend?

There have been increasing concerns around the carbon footprint of crypto mining, especially Bitcoin mining. With the industry’s major players capable of maximising their mining capacity, they also increase the amount of energy they use to achieve their gains. 

While the Committee is supportive of developing the crypto industry in Australia, it’s strong in its position that these activities should ‘not undermine Australia’s net-zero emissions obligations.’ Companies engaging in crypto mining should therefore find renewable energy sources to run their operations.

According to the recommendations, ‘The committee recommends that the Australian Government amend relevant legislation so that businesses undertaking digital asset ‘mining’ and related activities in Australia receive a company tax discount of 10 per cent if they source their own renewable energy for these activities.’

 
How a tax break will effect miners

 

The Impact of an Australian Tax Break on Cryptocurrency

The proposed tax break could help cement Australia’s status as a major hub for crypto and digital assets. While China has declared a ban on crypto mining and trading, a tax break sends a very different message, welcoming crypto companies to do business in Australia provided they do it sustainably, of course.

Not only could the move help to drive business to an Australian market that’s already experiencing rapid growth, but it will also help set a precedent for greener practices. This incentive will help companies make sustainable crypto mining a priority and could influence operations across the world. 

It’s not just Australia that’s looking to make crypto mining greener. Companies in the United States are developing greener mining practices, while also enjoying greater profits from their sustainable strategies. 

What are the Other Proposed Regulations?

In addition to the proposed tax break, the Committee has made several other recommendations that could bring much-needed regulation for crypto and digital assets in Australia. Providing a regulatory framework can help give more confidence to banks, many of which are wary of the security of cryptocurrencies, and as such do not lend themselves to working with businesses in the industry. Greater regulation of the industry will also help protect consumers investing in crypto, which now amounts to 17% of Australians.

With Australia seeking to become a major player in the crypto and digital asset industry, the Senate Committee’s recommendations could provide a much-needed boost to businesses. The tax break for miners could help see more businesses embracing sustainable mining like Mawson, and could influence policy across the globe, too. 

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