Pay people in crypto.
Would you take part of your salary in crypto?
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Happy Friday, peeps!
The sun is shining and spring is on its way. We can all use that, considering how gloomy the rest of the world sometimes feels, given the war in Europe and somewhat uncertain times.
I hesitate to write at all due to the ongoing crisis in Ukraine, but I think that would be pointless and I guess our show must go on, even if war crimes are being committed in a European country not far away from where I write this.
Maybe not the nicest way to start the weekly newsletter, but it is what it is.
Today we are talking about getting paid in crypto, before diving in it's worth making a disclaimer that this is not financial advice or advice in general. It is for entertainment purposes only. If you want to start paying people in cryptocurrency, please consult a financial advisor first!
(And as always, do not panic. You won't have to pay your employees in cryptocurrencies tomorrow. It's food for thought, nothing more, nothing less.)
Now let us explore whether it's even worth paying your employees in cryptocurrencies and how you can do it if you want to.
Paying people in…fiat?
It's not entirely wrong to call crypto mainstream these days. 9 out of 10 Americans have heard of cryptocurrencies, so it's nothing new to most. Yet, only 16% of Americans have used cryptocurrencies in one way or another. This number is increasing every month, but we’re still early. But as cryptocurrencies become more commoditized, we are seeing more and more use cases for digital currencies.
Tesla and Microsoft are accepting Bitcoin as payment, and this is (likely) a trend that will continue as both older companies accept Bitcoin and the next generation of startups, most likely built on some form of blockchain, come on the scene. It will not happen overnight and it will (probably) take a while, but for now, that's the way we are going.
With this in mind, companies are also starting to pay their employees in cryptocurrencies. Companies like Bitpay and Bitwage offer the ability to pay employees in the cryptocurrency of their choice. Global payroll providers Deel and Papaya Global also offer the ability to pay employees in cryptocurrencies. (Can we also bet that Remote will follow very soon?).
And when I say they pay their employees in cryptocurrencies, that's a truth with caveats. Because most countries require that employees be paid in fiat money.
Wait a minute, what? Fiat? The car manufacturer? Yes, they make cars, but we are not talking about them here. And not their money either.
Fiat money is money backed by a government. The US dollar and the euro are fiat money and the term is very common in the crypto world, so I will continue to use it in this article.
Since countries want people to be paid in fiat money, the above companies convert the fiat money they pay the employee and then add the chosen cryptocurrency to the employee's crypto wallet. So you, as a company, do not have to buy tons of bitcoin and manage this process, you are buying a service.
Why would that be worth doing it?
In my opinion, that's as good a reason as anything. It shows that you are keeping up with the times and that you are a progressive employer who is not afraid to jump on the latest trends. You are digitally minded and that (hopefully) says something about you as an employer.
If you have subcontractors all over the world, you can pay them in cryptocurrency in seconds instead of going the SWIFT route. It could be cost-neutral in that sense as well.
Why would not it be worth it?
It's still early.
Being first is not always the best option. There are still many unknowns with cryptocurrencies, and there could be changes that greatly impact the employee that you have no control over. Cryptocurrencies could be banned in certain countries, they could be subject to tax changes, etc.
There is no integration with existing payroll systems, which makes it difficult to pay employees in crypto.
It's a double-edged sword in this case. There could be advantages, but there could also be major disadvantages, and if the employee is not very confident or thorough in their assessment of taking portions of their salary in crypto, it could reflect poorly on you.
In summary, it might be worth introducing crypto as a payment method for your employees if it fits with what you want to be as an employer, and if you have employees who can handle the volatility crypto offers so far, and if you are willing to make sure you are compliant with local laws.
How to start?
First, contact your usual payroll and benefits provider; they may have a suggestion for you. If you do not find a solution there, contact the companies I mentioned. They will most likely be able to help you there and get you on your way. They probably also have insight into the different markets you operate in.
And as I said, in the short term, if you do not do it, there will not be any problems. Nothing will happen to you. But as always with these newsletters, you now know that some people are doing it, and I bet more people will start doing it. So keep an eye on the neighborhood.
Which honestly you are already doing since you are reading this, but also forward it to someone who may not be as enlightened as you are!