The International Monetary Fund (IMF) is calling for a significant tax hike on cryptocurrency mining operations to combat climate change. The financial institution argues that increasing electricity costs for miners by 85% through taxation could substantially reduce carbon emissions.
IMF officials estimate that a tax of $0.047 per kilowatt hour would generate $5.2 billion in annual revenue for governments worldwide while cutting emissions by 100 million tons yearly. This is equivalent to the annual carbon output of Belgium.
To address both environmental and health concerns, the IMF suggests an even higher tax of $0.089 per kilowatt hour. The organization is also proposing similar taxes for energy-intensive AI data centers.
While acknowledging the potential benefits, the IMF emphasizes the need for global cooperation to prevent miners from relocating to countries with lower tax rates. Critics also point out that the carbon footprint of some large corporations may exceed that of the entire cryptocurrency industry.
The proposed tax is part of a broader effort to make the crypto and AI sectors more environmentally sustainable. However, the effectiveness of this measure will depend on international collaboration and industry adoption of greener technologies.