In the past few years, cryptocurrency has made a remarkable progress and has become a solid source of investment for many people and companies. Crypto is no longer a TABU topic. This prompted several businesses to accept Bitcoin (BTC) or even other ALTCOINS (an alternative digital currency to Bitcoin) as a legal form of payment and transaction. Which makes us think that cryptocurrencies are here to stay!
If now it’s possible to buy a car, a house or even the candy bar for your wedding, why not thinking about introducing salaries paid in crypto. Many businesses have started thinking about introducing this kind of payment, other companies even have recently started paying their staff with Bitcoin as a way to attract top personal. This is a trend that was not adopted only by IT companies.
What are companies thinking about this?
Back in 2021, Francis Suares, the mayor of Miami, suggested the option to pay its municipal workers with crypto and even accept tax payments in cryptocurrency.
Jack Dorsey, the CEO of Twitter, also announced that the company is exploring ways to provide paychecks to its employees in Bitcoin.
The NBA's Sacramento Kings also announced publicly that they will soon offer crypto as a salary option for their whole organization.
What are people thinking about this?
A new survey conducted by SOFI , an increased number of employees are interested in being paid in alternative assets. Basically, 36% of workers want to have the possibility to receive part of or all of their paycheck in cryptocurrency, and 42% would want to receive NFTs (non-fungible tokens) as a performance reward.
Another poll conducted by financial consultancy deVere Group, revealed that crypto could become more common for younger employees. More than a third of millennials (age between 26-42) and 50% of Generation Z (below 25 years old), would be more than happy to receive half of their paycheck in Bitcoin or other crypto currencies.
Which are the benefits?
* The power of decentralization and Speed - As cryptocurrency runs on decentralized peer-to-peer systems, all transactions are realized almost instantly. You cut out the middleman – the bank. This means that location of your staff, hour of transfer and day are not a problem anymore.
* Workforce appeal - Crypto is hot topic right now, it is still not accepted by all companies and business. Adopting it now can be a good option for branding and even to increase employee engagement. There are lots of young people and even older generations that learnt about blockchain and crypto, they invest in it. Having the option to be paid or at least receive your performance bonus in cryptocurrencies could give your business an edge in recruitment, attracting more younger employees, and in retention in comparison with your competitors.
* Tax efficiency - Depending on the country you are based, crypto might be taxed differently. However, receiving all or part of salary in cryptocurrency could be more tax efficient for some employees. In some countries, this may apply now more for freelancers that work on project based, than regular employees. However, crypto as a payment method is here to stay which for sure will influence the current laws and tax regulations we have now.
* A source of investment - In comparison to cash payments or FIAT payments (physical money—both paper money and coins), cryptocurrency fluctuates in value. This means that if the value of the crypto gets appreciated, employees may be paid far more than what they would have received in FIAT money. Of course, depreciation is also possible, but we will talk about it at risks.
What about the risks?
* Volatility - Cryptocurrency has the potential to rise suddenly, the side effect can happen too. If crypto is used for base salary payments, this could leave staff seriously underfunded without any warning. A better idea would be using cryptocurrencies only for bonuses or part of the salary, and this could reduce this risk.
* You are on your own - Once a transaction is processed, let’s say you transfer an amount of crypto from your wallet to someone else’s wallet, but by mistake you made a typo in the wallet address, that crypto is for good transferred. There is no going back. However, the centralized wallets such as Binance, Crypto.com etc offer you the possibility to use a physical card. The money used are the stable coins such as USDT, BUSD etc. If the card is being used for an online or physical purchase and it wasn’t you, a dispute transaction process is still possible to be followed.
* You need to learn a lot - Crypto can be compared with learning a new language. In order to make sure you avoid common newbie mistakes, it’s really important to learn the basics and remain informed. For example, in order to be paid in cryptocurrencies you will need access to a Crypto Wallet. The most common ones are the hot wallets (connected to the internet) which are also centralized providers: Binance, Crypto.com, Coinbase etc. These applications give you access to all sort of crypto related features and possibilities, so there is a technical curve to be followed too.
* Take care of your taxes - Cryptocurrencies and profits out of it are taxed based on the regulations from your country of residence. You need to make sure you get yourself informed correctly and act accordingly to the law itself. Maybe finding someone specialized in professional tax, at least for the first year, could help you. This is a matter that affects both the company and the employee.
Top companies from different work sectors that already offer crypto salaries:
- Bitwage is a company that offers invoice, payroll services to its clients. Starting 2013, they have more than 5000 employees that have applied for for Coinality’s Bitcoin-paying service. Since then, Bitwage allows their employees based in UK, Europe and USA to convert their fiat salary into crypto. Back in 2021, they also started providing their employees with the option to receive their salaries in cryptocurrency.
- GMO Group is a Japanese company that works in the advancement of internet infrastructure, online advertising, media, internet finance, and cryptocurrencies. They offer their employees the possibility to receive up to 100.000 YEN (~900$) of their monthly salary paid in Bitcoin. Their employees still have the possibility to receive full salary in YEN. However, approximately 4000 employees chose to receive BTC compensations.
- SC5 is a internet technology firm that creates apps, software based in Finland. Since 2013, they started paying their employees with Bitcoin.
- Spot.IM or better known as Open Web, is a project that enhances online discussions. Their platform uses artificial intelligence (AI) and machine learning in order to encourage healthy conversations and increase community engagement.
- Purse.io is a company that provides their customers with unused Amazon gift cards and offers users the possibility to exchange their Amazon Gift card with BTC. All employees at Purse.io get their paycheck paid in Bitcoin Cash (BCH).
Besides them there are many other crypto exchanges or crypto related companies that offer this option to their employees. According to a recent Cointelegraph report, Twitter might be the next big company that will offer Bitcoin salary payments to their employees.
Crypto adoption is increasing very fast and it’s just a matter of time until this will become ‘normal’ payment method. Moreover, offering cryptocurrency salaries might attract younger generations, might increase employee engagement, might increase your brand visibility and the most important thing, might help you build a team where the company values are met: innovation, future-thinking, technology, openness to new and flexibility. And.. why not recognize that you can become ‘trendier and cooler’ among your competitors.
But the question is: Are you open to lead your company towards prosperity and innovation now?
