The Rise of Cryptocurrency Cryptocurrency has been on the rise in recent years, partly due to its increased mainstream adoption. While Bitcoin is themost well-known cryptocurrency, there are now over 12,000 different types in circulation. And it’s not just individuals who are investing in crypto. Businesses are getting involved too. In 2019, Microsoft began allowing customers to use Bitcoin to buy content in its Windows and Xbox stores. And in 2021, Tesla made headlines when it announced that it had invested $1.5 billion in Bitcoin and would accept the cryptocurrency as payment. The appeal of cryptocurrency is clear. It’sborderless,decentralised, and secure. For businesses, that means lower transaction fees and reduced fraudulent activity. For individuals, it offers an alternative to traditional banking systems. Could Crypto Change the Way We Get Paid? With its growing popularity, it’s not surprising that people are now interested in using cryptocurrency to receive their salary. After all, what’s not to like about being paid in something that could increase in value? Over the past few years, several high-profile individuals have received part of their salary in Bitcoin. From famous sports stars like former Seattle Seahawk Russell Okung, musicians Mel B and 50 Cent and even politicians like Miami Mayor Francis Suarez. And it’s not just celebrities and politicians interested in being paid in crypto. According to research conducted by SoFi, over a third (36%) of workers want the ability to receive part or all of their paycheck in cryptocurrency. Paying Employees in Cryptocurrency: The Perks So, what are the benefits of paying your employees in cryptocurrency? First, it could help you attract and retain top talent, particularly tech-savvy employees interested in working for forward-thinking businesses and Gen Z and millennial employees who are more comfortable with digital currencies. Second, the rise of global mobility means more employees are working remotely than ever before. According to the World Population Review, over 8 million US expatriates are working and living abroad. The think tank Institute for Public Policy Research (IPPR) estimates that around 5.5 million Brits are living abroad - that’s almost 1 in 10 of the UK population! With more employees working internationally, business owners have to pay salaries in multiple currencies which often comes with high transaction fees and foreign exchange costs. However, cryptocurrency can be used to pay employees no matter where they are in the world without these additional costs. Finally, with the rise of stablecoins like USDT, the volatility risk is significantly reduced. Stablecoins have been trialled and tested by major companies like IBM, Facebook, and JPMorgan Chase. Essentially, these digital currencies are pegged to a real-world asset like the US dollar, which means they avoid the huge fluctuations in value often seen with other types of cryptocurrency. This means that businesses can be more confident about using them to pay their employees without worrying about the currency’s value fluctuating. Risks of Paying Employees in Cryptocurrency Of course, there are some challenges associated with paying your employees in cryptocurrency. First, it’s important to remember that the value of cryptocurrency is incredibly volatile. This week the news hit that the popular crypto exchange FTX filed for bankruptcy. This sent shockwaves through the financial industry as the company could owe over 1 million creditors. While this is an extreme example, it does serve to highlight the risks associated with cryptocurrency. For example, if you paid your employees in Bitcoin and the value of Bitcoin suddenly crashed, your employees would be left out of pocket. Compliance is another big issue. Cryptocurrency is still a relatively new phenomenon, and the regulatory landscape is constantly changing. That means that there’s a real risk that businesses could inadvertently run afoul of the law by paying their employees in crypto. For example, countries like Egypt and Qatar have banned Fron t Cove r Fea t ur e 10 Finance Monthly.
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