Crypto Remuneration : Getting Paid in Crypto is Now Mainstream
Crypto Remuneration : In 2021, Bitcoin had been both legitimized and at the mercy of Elon Musk, it hit a new ATH, and it had become increasingly used for paying employees. The largest issue that crypto faces in becoming a regular way to pay employees in crypto is that most central banks do not consider them a currency or money.
The issue for employers to pay wages in Bitcoin would be that they have to remain in line with regulation, such as paying minimum wage for example. Plus, if there’s one party that want things done their way, it’s the IRS, and paying in crypto poses a threat to paying taxation. This can potentially be done, with the IRS themselves claiming that the difference between your adjusted bias and how much it sold for is reported.
Of course, reporting taxes on the sold currency also may mean paying short-term capital gains tax too, unless you hold it for longer than a year. If employees wish to be paid in crypto but worry the coin will take a hit in the market before they have a chance to pay rent or buy groceries, then at the very least a loss can be written off as a capital loss, which could decrease the future amount of capital gains tax owed.
However, with employment becoming increasingly global, and somewhat decentralized itself (freelancing), it’s becoming increasingly easier to navigate the gray areas and pay in crypto.
One thing that companies can likely do to make life easier, even with their domestic contracted employees, is to give them bonuses in cryptocurrency. Employee benefits can come in all shapes and sizes, from holidays abroad to a boatload of Ethereum. Of course, this is something that the employees need to be happy about themselves and given the choice, but there are seemingly ways around getting crypto into the hands of employees.
Like with the bonus maneuver, it’s evident that crypto is becoming popular with winning prizes. There are already several Bitcoin lotteries online for example, and this will likely make its way into the mainstream of TV adverts and shopping malls. In fact, given how easy it is becoming to transfer and manage crypto to one another, there may be an increase in decentralized raffles and lotteries. Whether or not to trust the host, given that there is no official middleman, could be mitigated via smart contracts in which the process of picking the winner and delivering them the money is both transparent and guaranteed.
The bitcoin casino industry is also exploding in popularity for obvious reasons. Not only is it convenient and fast to deposit and withdraw, but the gambling activity isn’t going to appear on (potentially shared) bank statements that a partner or financial institution will judge you for. Plus, crypto casinos, like crypto-anything, tend to be a bit more transparent about the technology and processes being used, which is important when using online casinos.
Earlier this year, Ethereum’s co-founder Vitalik Buterin donated $1 billion worth of cryptocurrency to India for Covid aid. Not only did this charitable act make the news, it showed the power of crypto, particularly given that the crypto in question wasn’t even Ethereum, but Shiba Inu coins that Vitalik had been holding.
It did also pose as a cautionary tale too, particularly for Altcoins. Immediately after the donation, Shiba Inu crashed by 50% in price, making the $1 billion donations now closer to $400 million. The reason for this was that he was donating 5% of the Shiba Inu coins that were in circulation, and given the Indian government were going to be selling these for fiat currency, supply was about to increase and plummet the price.
So, whilst the deed was a good one, it also showed that very large payments, be it charity, remuneration or prize winnings can manipulate a coin that has a fairly low market cap compared to the USD.
Founder Dinis Guarda
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