The legislature of the State of Montana passes a bill that protects the rights of crypto miners. In essence, it prohibits discriminatory power rates imposed on crypto miners and prohibits additional taxation on the use of cryptocurrency as a payment method.
This bill is a breath of fresh air and a big win for an industry that has been hounded by regulatory pressure. The bill was sponsored by Rep. Daniel Zolnikov, a Montana State senator. It is now up to the governor to sign it into law.
The Montana Bill States that Mining is Good for the Power Grid
Below is a section of Bill 178:
digital asset mining has the potential to stabilize the grid and provide revenue for 18 infrastructure upgrades statewide.
Mont. SB 178 (68th Leg., 2023)
This part of the bill shows how progressive this bill is. First, the bill recognizes the potential of digital asset mining to stabilize the power grid. A lot of crypto believers know that proof-of-stake (PoS) cryptocurrencies like Bitcoin can be a store of energy. This might sound confusing for many since Bitcoin is not a battery technology, but it is quite simple.
To understand the concept better we have to understand how Bitcoin works. Maintaining the Bitcoin Network involves a lot of mining equipment. Mining equipment validates transactions and adds new blocks to the network. In return, they earn Bitcoin for the trouble.
Bitcoin mining rigs use up a lot of power and the electrical grid is the usual source. This can add to the load of the grid during high demand. However, crypto-mining operations can also be flexible in their electricity consumption and absorb excess power during low demand. Miners can also limit operations during times of crisis. This is the reason why a PoS asset like Bitcoin is sometimes called a store of energy. As a bonus, revenues earned from mining can be used to upgrade power structures.
Discriminatory Energy Rates and Taxation of Crypto Payments Are Prohibited
The commission may not establish a rate classification for digital asset mining, digital asset mining businesses, or home digital asset mining that creates UNDULY discriminatory rates.
Mont. SB 178 (68th Leg., 2023)
The creators of the bill know that having a separate and higher power rate will put crypto miners at a disadvantage. The bill prevents this from ever happening.
DIGITAL ASSETS USED AS A METHOD OF PAYMENT MAY 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
Mont. SB 178 (68th Leg., 2023)
This section of the bill clearly states that it will be illegal to impose additional taxes just because crypto was used for payment. This provision will encourage merchants to accept crypto as payment since customers won’t have to pay more.
The State of Montana Bill is for the Future
The proponents of the bill have surely done their research. They understood that crypto is the future and it is just a matter of adopting or being left behind. Crypto-friendly jurisdictions like Dubai and Lugano are reaping the benefits of their decision. The Montana legislature understood that crypto is a technological innovation that can benefit the “Treasure State” and its people.
Read the Bill here
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