IMF experts Shafik Hebous and Nate Vernon-Lin recently noted that crypto mining and data centers now account for 2% of global electricity use and nearly 1% of global emissions. They added that the mining footprint is growing and could reach 3.5% in three years. The experts called for the implementation of a tax system that’ll steer companies toward curbing emissions.
IMF Proposal
Shafik and Nate noted that the IMF estimates a direct tax of $0.047 per kilowatt-hour would drive the crypto mining industry to curb its emissions in line with global goals. If considering air pollution’s impact on local health as well, that tax rate would rise to $0.089, translating into an 85% increase in average electricity price for miners. Such a levy would raise annual government revenue of $5.2 billion globally and reduce annual emissions by 100 million tons (around Belgium’s current emissions).
MENA Experts' Opinions
Talal Tabaa, Founder and CEO of MENA-based crypto exchange CoinMENA, believes that the IMF’s proposal underscores a fundamental misunderstanding of Bitcoin, energy, and free markets. He argues that such a tax would stifle innovation, increase costs, and be nearly impossible to enforce globally due to the existence of tax havens. Mohamed El Masri, Managing Partner of UAE-based Hodler Investments, thinks that the IMF’s call to impose a power tax of $0.047 – $0.089 per kilowatt-hour on crypto and AI computing is quite aggressive. He asserts that the IMF's focus on this issue demonstrates their recognition of crypto and AI as significant economic drivers.
Mining Companies Shifting to AI
Already, major Bitcoin mining companies have started to swap out some of their mining equipment in favor of rigs used to run and train AI systems. These pivots have been warmly received by investors, leading to the market cap of 14 major Bitcoin mining companies jumping in value by 22%, or $4 billion, since the beginning of June, per a J.P. Morgan report. Major Bitcoin miner Core Scientific recently landed a 12-year contract with AI hyperscaler CoreWeave. This deal is expected to generate over $3.5 billion in revenue by supplying 200 megawatts of infrastructure.
IMF’s proposals for taxing crypto mining receive mixed reviews among experts. Some argue it will stifle innovation, while others believe it is necessary for sustainable development and attracting new investments.
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