Can cryptocurrencies be used for salaries?

July 02, 2020 Quick read

Why would you want to be paid in crypto?

Crypto payments have a lot of benefits to them. Any cryptocurrency payments are done on top of the blockchain technology, which means that they are immutable, transparent, decentralized, and pretty much irreversible.

All of this makes them a lot safer. Next, crypto payments are processed almost instantly in most cases, and they can be made at any time of day and night. Not to mention that making cryptocurrency payments is a lot cheaper than making payments with fiat money, as there are no intermediaries such as banks and financial institutions that would require large fees.

With crypto, you decide how much you are going to pay for transaction processing, but most fees are usually only a few cents.

In the end, receiving payment in crypto would mean that you are paid instantly, in a safe and pseudonymous way, and you can already spend that money in a number of different ways online and offline. With the adoption continuously speeding up, more and more possibilities are emerging, and soon enough, people will likely have equal possibilities with crypto and fiat.

Downsides of being paid in crypto

Of course, the crypto industry is far from perfect, although it is worth noting that it is still quite young and underdeveloped, despite all of its potentials.

With that in mind, there are a few downsides that might or might not get resolved along the way.

For example, if you receive payment in Bitcoin or Litecoin and you forget your wallet password, you will never be able to access that money ever again. If you lose your personal secure key/password, that money is as good as gone.

In other words, you have the responsibility of managing it entirely on your own.

Apart from that, it is worth noting that cryptos are still not tied to any national standard of value. As such, they are considered exchange tokens, rather than legal tender. Not to mention that they are extremely volatile, although this can be bypassed through the use of stablecoins.

Next, cryptos are still not regulated, although the authorities were quite quick to introduce crypto taxes, which could end up being larger than your income due to all the mentioned issues.

Are cryptos being used for salaries already?

As you can see, there are quite a few problems with the idea of using cryptocurrency for salaries, many of which are very serious.

But even so, it does seem that the world is moving towards this use of crypto. Countries such as the Netherlands, New Zealand, and even the UK, all have tax rules for crypto salaries. This indicates that the countries are ready to recognize cryptocurrency as salary, provided that the employers wish to pay their workers with digital coins, and that the employees are willing to accept.

Meanwhile, in other industries, such as the sports industry, there were already cases of athletes receiving crypto payments. One of the best examples of this is Nikolaj Rosenthal, who is a professional hockey player, and officially the first player in the world to be paid fully and exclusively in Bitcoin.

Mr. Rosenthal is also the CEO of a trading platform Evonax, which is yet another signal of his support of the crypto world.

In the end, whether or not cryptos will actually become a new standard for paying wages has yet to be seen. A lot still hangs in the air, waiting to be resolved and managed. However, there are cases where salaries are being paid in crypto, and since the possibility is there, it is likely only a matter of time before more people decide to try it out.


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