If cryptocurrency is established to disrupt the prevailing financial system by greatly improving the transaction speed, privacy, cost and convenience, it will be a matter of time before most people are paid in cryptocurrencies.
The definition of consumer payment has been evolving since bartering, the first known form of value exchange, for goods and services. Today, the predominant form of transactions occur in the proper execution of fiat currencies, which was initially utilized in the 7th century. For centuries, the only change has been how it has been enacted throughout human history. The world has adopted fiat digital payments with emergence of debit cards which represent a helpful bridge between old and new ways of fiat payments. Interestingly, we are still in the midst of another change which might redefine how exactly we perceive payment – through cryptocurrencies.
Many experts believe that cryptocurrencies are the catalyst for the next payment revolution, which certainly works for new and different payment methods as we are gradually getting into an absolutely digitised world. Whilst the popularity of this new kind of currency remains to be observed, there’s now a variety of crypto bank card options that enable the exchange of cryptocurrency for spendable fiat currency at the touch of a button. Cryptocurrencies, while still an often underestimated means of payment, are having their foot in the doorway thanks to payment apps and their multifunctionality. Apps, such as Bitpay, Crypto.com, and Revolut, have integrated features that enable buying and selling of cryptocurrencies, along with spending in certain instances, to attract new and savvy mainstream customers for their platforms.
Cryptocurrency as the ongoing future of payments
Apps like the above mentioned are where the ongoing future of money and payment are heading. Based on a report by Pew Research Center, it’s estimated that a lot more than 2.5 billion people have smartphones allowing a third of the world’s population for connecting to the web and to enjoy a wholly digital, and convenient payment experience on the mobile devices. Therefore, along with appropriate incentives, these apps could drive the brand new wave of adoption to the masses and create real-world use cases for cryptocurrencies.
In August 2019, New Zealand’s tax authorities made a ruling which allows companies to legally pay its employees in Bitcoin (BTC) and other cryptocurrencies.Additionally, companies will have the ability to deduct income taxes using their current PAYE (Pay-As-You-Earn) frameworks under the Income Tax Act 2007. This bold move by the New Zealand’s government will probably gain the attention of other crypto-friendly nations, which might cause a number of regulatory reforms regarding salary issued in cryptocurrencies, along with a growing fascination with more individuals looking to receive their salaries in BTC or other cryptocurrencies. Crypto payment apps offering Visa-backed debit cards might also gain a good number of users, since these apps enables users to spend cryptocurrencies for real-world purchases. However, it’s undeniable that bitcoin mixer, along with other cryptocurrencies, could be incredibly volatile. Industry is famously unpredictable, and anyone accepting Bitcoin because of their salary could see the value plummet, along with skyrocket. There needs to be careful consideration by a person over what they can afford to lose.
Employee’s salary in Bitcoin
Employers, particularly in the tech startup sphere, are offering employees the possibility to receive their salary in cryptocurrencies in order to attract new talents and complementing this with other job benefits. Bitcoin (BTC) is one of the most used kinds of cryptocurrencies amongst both employers and employees as the most well-liked cryptocurrency for salary payments. There are several reasons including better USD-to-BTC rates (as compared to paying via the native fiat currency) when coping with internationally-based employees, or if the business is funded through Initial Coin Offerings (ICOs), where they raised their fundings through BTC, thus a sufficient method of getting BTC within the business’s reserve for payment-related matters. Also, it can be seen from existing Bitcoin earners where these employees have deployed various methods to handle their crypto salaries.
One approach is through “immediate cash-out,” practiced by Lindsay Holland, assistant director of the Bitcoin Foundation. Like most of the foundation’s employees, Holland receives her entire salary in the currency, and she leverages on the available stablecoins such as USDT or crypto payment apps in the event where she needs to convert them into fiat currencies to fulfill her everyday expenses which can only be produced through fiat currencies.
Industry and commerce are truly globalized today, by having an ever-increasing number of workers working remotely. Bitcoin payments could be sent conveniently anywhere, with the benefit of not having to manage foreign banking, exchange rates, delays and holding times. Although transaction fees could possibly be incurred, Bitcoins are in an easier way to handle than those historically levied by financial institutions and can be used as a simple way to onboard employees in the complex world of investments. As opposed to navigating complicated stock options and investment strategies given by brokers and banks, Bitcoin’s direct payment enables a person to take straightforward and instant control of their very own cryptocurrency portfolio. So keeping an open mind to adopting crypto as opposed to fiat currency might open doors to some lucrative job opportunities.
Encouragingly enough, there are many businesses from the broader world already looking into cryptocurrency instead for the salaries of their employees. In December 2017, the Japanese Internet firm GMO Group revealed that they were offering 4,000 employees the possibility of earning a portion of their salaries in bitcoin. Recently, the business expanded into cryptocurrency mining and trading, commenting that the change was required for “nurturing and developing cryptocurrency literacy.”
Understandably, the above mentioned examples for Bitcoin are definately not being indicative of a widespread reality. Cryptocurrencies may gain traction and popularity amongst the folks, but they are still struggling to meet up with international financial frameworks and the regulatory bodies which regulate them. The problem is oftentimes deeply ingrained. Bitcoin could be illegal to varying degrees depending on the country the employee is in. As an example, Bitcoin never been legal in any capacity in Bolivia, during Ecuador the currency was outlawed in mid-2014 within the country’s financial reforms.
On the contrary, China’s stance on Bitcoin has been rather tricky as they’ve banned ICOs, cryptocurrency exchanges and made mining illegal in the united states, but only recognised and protected Bitcoin since 2013 as an electronic asset (other cryptocurrencies are exempted from the recognition and protection for the Chinese law). This might in part be as a result of fact that many Chinese citizens are very active Bitcoin trading. Similarly, Internal Revenue Service (IRS), the federal agency of the United States, considers Bitcoin as home rather than a currency, as the Fair Labor Standards Act requires that employers pay their staff “cash or negotiable instruments payable at par.”
Given the truth that legislators around the world have yet to ascertain exactly the financial status of cryptocurrencies, it may cause other unwanted dilemmas for folks looking forward to receiving Bitcoin as salaries, specifically considering that the legal regulation may encompass tax-related matters which, depending on the employee’s location, can become a sophisticated issue. In the UK, HM Treasury issued guidelines in 2018 which stated that cryptocurrencies received as employment payments are subject to national insurance and income tax, but there are further underlying considerations in other jurisdictions, such as capital gains that must also be factored in.
A Salary Worth Considering
The prospect of obtaining Bitcoin as a form of salary might be an enticing option for many individuals, especially for millennials, who are also seeking a fresh form of investment opportunity that has a lesser learning curve and capital required as compared to the traditional stock market. However, during the time of writing, cryptocurrencies may carry a great deal of stigma as a result of perceived risks and legal implications that include moving payroll over to this new financial concept, since most regulatory bodies continue to be uncertain in the exact categorisation of Bitcoin and other cryptocurrencies in the financial market.
Despite its shortcomings, the team at MyCryptoMixer believes that cryptocurrency is certainly gaining traction and exposure in the mainstream market, as evidently shown in growing coverages from mainstream financial media outlets such as Forbes and Bloomberg. Regulatory bodies are taking an active interest and the number of individuals with a digital wallet is on the rise. If the cryptocurrency space continues to evolve and deliver disruptive solutions for the global financial markets, taking the plunge and switching to Bitcoin for salary payments is surely a huge advance for most people, moving forward.