Cryptocurrency is increasingly popular, with certain states in America now trialling the use of cryptocurrency to pay for utility bills and websites such as slotboss.co.uk offering players the chance to use crypto to play slots online. Now, companies are beginning to offer employees the opportunity to get paid in bitcoin. This can be a great way for employees to break into digital currency, especially now that big companies such as Tesla and Microsoft have announced that they are planning to accept Bitcoin as a standard payment. However, the regulations around crypto are complicated and still being agreed upon.
There are a number of cryptocurrencies that could be used in crypto payrolls, such as Ethereum (ETH) and Litecoin (LTC), but Bitcoin is by far the most popular option.
The advantages of cryptocurrency in payroll
Cryptocurrency is appealing to employees due to its low fees and almost instantaneous transfers. This is especially useful for international workers.
Bitcoin transfers are also secure and visible. Every payment can be tracked and is direct, with no middle man. The peer-to-peer network also avoids centralised authorities such as banks and governments. This decentralised system means that the value of cryptocurrency is independent of financial institutions. Because of this, crypto becomes an investment.
The separation from government institutions means that crypto has the potential to increase in value, resulting in employees collecting more than their base salary depending on the value of the cryptocurrency they are paid in. This can also make crypto a great employee benefit to offer your workers.
The disadvantages of cryptocurrency in payroll
Cryptocurrency is volatile and regularly increases and decreases significantly in value over short periods of time. Because of this, it may be an unreliable way of paying a salary, as employees could end up with less than their base pay if they accept crypto payments.
There is also a risk to the reputation of a company that uses cryptocurrency to pay staff. There is an association between cryptocurrency and illegal activities like money laundering, so it may be worth putting some extra security measures in place if you do opt to use cryptocurrency.
There are a number of countries which have outright bans on cryptocurrency, and regulations and tax treatments can vary dramatically across different countries. This can make international transactions in particular extremely complicated if you are not up to date on the variety of jargon and language used to describe different cryptocurrencies.
It can also be difficult to tie cryptocurrencies like bitcoin to existing legal money flows. Most banks will not support crypto, meaning that sending crypto through your bank is impossible. There is a steady growth of decentralised finance systems, but as it stands currently systems such as loans and credit cards don’t work with cryptocurrencies, which severely limits their usability.
How is Bitcoin regulated?
Currently, there are very few countries that have listed Bitcoin or any other cryptocurrency as legal tender, apart from El Salvador, which made the move in September of 2021 to legislate Bitcoin as its official currency.
On the other hand, there are many countries which currently have an absolute ban on the use of cryptocurrency, even down to just owning or trading crypto. There are nine countries with complete bans on crypto; Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisia. In addition to this, there are a further 42 countries with an implicit ban on crypto, which means that the government has restricted all banks and financial institutions from offering any services to cryptocurrency providers or dealing with crypto in any way.
This means that on a global scale, it is currently impossible for companies to offer a bitcoin wage.