Mined in America Act Would Put Bitcoin Network at Risk

The Mined In America Act of 2026 introduced by Senator Cassidy of Louisiana and Senator Lummis of Wyoming is the first instance of the United States Federal Government addressing Bitcoin mining from a national security perspective.

The bill establishes a certification program requiring a phase out of foreign adversary produced mining hardware and barring foreign ownership in order to receive government grants, loans, and capital gains exemptions. It also seeks to explicitly codify a Strategic Bitcoin Reserve in legislation following the Executive Order signed by Trump last year, introducing financial incentives for miners to sell their coins to the United States government. 

This would establish a subsidy and incentive framework that disproportionately benefits “certified” miners in the United States, distorting the overall economic incentives of the Bitcoin network, and captures U.S. based miners in a situation where dependence on associated loan or grant programs makes it economically non-viable for them to deny government demands for further information or monitoring. 

Introducing Government Grants & Loans Programs

The bill proposes capital gains exemptions for certified mining operations – meaning pools or miners who meet the program’s certification requirements – who sell “certified bitcoin” – meaning bitcoin mined by miners certified under the mined in America program – to the United States government for inclusion in the Strategic Bitcoin Reserve. 

This is a further economic distortion of mining competitiveness by introducing favorable benefits only to certain miners which improve their profitability. It also creates questions for bitcoin's fungibility by giving only certified coins a relief from capital gains, making certified coins more valuable for miners.

Additional proposed programs that would require certification are loan guarantees for replacing adversary sourced hardware, converting operations for demand-response programs, and enabling grid load management systems for emissions reduction and load flexibility; Loans for projects that improve load flexibility or energy efficiency at sites previously housing adversary produced miners; Grants for improving load flexibility by including miners in "smart grid" investment grants; And grants and loans for rural compute facilities with requirements to hire locally.

Mining is a very competitive business model. The difficulty adjustment that is core to the Bitcoin protocol guarantees that as new miners join the network, the revenue of all miners decreases. This is a pressure constantly pushing miners' profit margins down. 

Preferential access to capital, such as via loans and grants, gives miners who take advantage of such programs a competitive edge over miners that do not. If these programs are enough to incentivize material increases in network hashrate, it reduces the profit margins of all miners by spreading the pre-defined block reward between more miners, thereby further disadvantaging mining operations who do not qualify for these programs. 

The bill even leaves room for a higher certification level for operations that exceed the phase out timelines in the bill for adversary sourced hardware in order to gate access for further grant or loan programs to only those meeting this higher bar of certification. 

The bill gives the Secretary of Energy 180 days from enactment of the bill to define documentation requirements to prove compliance with the bill for certification. 

Establishing Miner Certifications

In order to be eligible to participate in the subsidies programs, the bill orders the establishment of a certification program by the Secretary of Commerce to ensure that mining pools and mining operations comply with hardware sourcing standards, as well as ownership requirements.

The hardware sourcing requirements ban the purchase of any new hardware purchases produced by designated foreign adversaries after January, 1 2027. Each year until 2030 adds a decreasing maximum percentage of foreign sourced hardware being operated by a miner to comply: January 1, 2028: Maximum of 75%, January 1, 2029: Maximum of 50%, January 1, 2030: Maximum of 0%. All competitive mining machines are currently produced in Taiwan, China, and South Korea, the bulk coming from China – a foreign adversary. 

While the certification program is explicitly not required to participate in mining in the United States, and is solely used as a qualifying requirement for participation in relevant government grant and loan programs, it still leaves many questions, as well as problematic implications. 

All mining pools or operations that wish to apply for designated grants and loans must: 

"...document and attest to compliance with the applicable hardware sourcing standards" 

"...maintain cybersecurity protocols consistent with minimum standards established by the Secretary, including protection of network systems, private keys, remote access tools, and physical facilities..."

"...satisfy any additional criteria that the Secretary determines to be necessary to uphold the integrity of the certification."

What information is necessary to document in order to prove compliance with the certification program? Is it simply an attestation that certain models of hardware are being run? Does that need to be manually inspected? Purchase orders provided? Serial numbers? What happens when the government starts demanding more and more information from entities that have qualified for different programs after they have already enrolled and begun receiving grants or loans? 

Mining pools are required to document such things, and given that pools do not generally operate their own hardware, this means that as a consequence of this bill mining pools must collect and document information from their customers in order to qualify for any relevant programs for miners. 

This potentially creates massive complications for mining pools who wish to be certified under this bill, as it would require auditing and verifying that miners using their pool do not use foreign hardware and do not have foreign ownership or influence. Most mining pools function by having customers from all over the world direct the hash power of their local machines to the pools operation.

The proposed requirements would create an immense compliance overhead for mining pools wishing to seek certification, and potential liability risks if their auditing and verification practices fail to identify non-compliant mining operations using their pool. 

In order to qualify for certification, mining pools and operations must not have any foreign adversary ownership or undue influence, must be housed or incorporated in the United States (or an allied jurisdiction), and are barred from using shell corporations or any corporate structure to obscure ownership. Applicants for certification must disclose all ownership information, and identify all individuals or persons exercising any control over the operation during application, and certification is only valid for a maximum of two years. 

A similar strategic study is directed to be conducted on the relevance or value of "decentralized AI." Lastly, a directive for the National Institute of Science and Technology (NIST) to fund grants to design mining rigs meeting U.S. cybersecurity standards, and partnerships to retool U.S. manufacturing for domestic mining hardware production. This would be a critical component of the bill, as the vast majority of competitive mining equipment is currently being produced in China, a designated foreign adversary. 

Overall, this bill presents a serious risk and distortionary influence to Bitcoin's neutrality and decentralization.

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