A proposal to extend tax breaks to cryptocurrency miners who make a home in the U.S. state of Kentucky has advanced in spite of a potential drain on the government's coffers.
The Budget Committee for the Kentucky House of Representatives approved the measure in a 19-2 vote, as reported by the Lexington Herald-Leader, a local publication in the state. As The Block reported in January, the measure would extend sales and use tax breaks, particularly for the electricity necessary to power crypto mines, which typically operate 24/7.
A fiscal note related to the bill indicates that the state could lose as much as $9 million per year, a number premised on the idea that "at least one new facility would come online in the next year, and existing facilities in the state would be able to take advantage of the exemption," per the note.
The Herald-Leader's report indicates that the crypto mining bill fits into a broader effort to attract technology firms to the state through the use of tax incentives. The budget committee reportedly approved a separate measure extending sales and use breaks to corporations that open data centers in the state.
Lawmakers in the Kentucky Senate are also considering a similar bill focused on crypto mining.
The developments come as the crypto mining footprint in the United States continues to grow, buoyed by high digital asset prices and a willingness among institutional investors to place bets on the industry.