Benefits of Crypto payroll for Employees and Companies

Why Cryptocurrencies Are the Next Big Thing in Salary Payment Mechanism

Can cryptocurrencies transform the future of payroll execution? Can it go on to become a substantial recruiting driver for the youth, especially the ones living in some of the biggest cities around the world? Pick up any blockchain news magazine, the answer to all the questions mentioned above would be in the affirmative. However, the volatility of cryptocurrencies could be something that could hinder the adoption of crypto payroll by companies.

Can Cryptocurrencies be Leveraged as a Significant Work Perk?

Since 2018, the GMO Internet Group has been paying its employees salaries in the range of 10,000 yen to 100,000 yen in Bitcoin. The employees also get incentivized through an additional 10% of the salary that they opt to receive in Bitcoin.

Why Getting Paid in Cryptocurrencies is a Lucrative Option

Payments through cryptocurrencies have their share of pros and cons. Let’s evaluate both the advantages as well as the disadvantages to ascertain if crypto payroll can benefit the companies and their employees.

Benefits of Crypto Payroll

1. Easy to Use

If the employees are paid via cryptocurrencies, they need not exchange it into fiat currency or exhaust their funds immediately. However, they always have the option to do so if they want; the surge in the number of e-commerce companies has ensured that. Employees can now exchange their digital currencies through various sites too.

2. No Geographical Boundaries

Most cryptocurrencies can be used internationally. Crypto payments can be exchanged into any currency at any point. The smartest people would want their cryptocurrencies exchanged either into USD or other digital currencies when the exchange rates suit them.

3. Low Cost of Transaction

Cryptocurrencies work on the principle of blockchain, which functions on a decentralized peer-to-peer network model. Thus, there is no middleman or intermediate in between to carry out transactions between two parties.

4. Enhanced Earning Potential

As the recipients aren’t bound to withdraw their crypto assets or exchange their funds for fiat currencies, they are at an advantageous position. They can cash out their funds when the exchange rates suit them. It might translate into a lucrative bonus too or they can use DeFi applications to gain a fixed return on their cryptocurrencies.

5. Employer Attracts Better Talent

The benefits mentioned above play a crucial role when employees make their career-related choices and take a call on which company to join.

Disadvantages of Crypto Payroll

1. High Volatility

Most cryptocurrencies have a highly volatile monetary value because of the lack of government regulations. That’s why it isn’t a good idea for companies to pay their employees completely in any cryptocurrency. But Stable coins now solve this problem and remove volatility from the equation.

2. Taxation

Although cryptocurrencies are a great financial prospect as their values can increase exponentially, it’s important to note that any surge in their value is subject to taxation under capital gains in some countries. Thus, one must pay capital gains tax on the enhanced value of cryptocurrencies.

Conclusion

It goes without saying that introducing crypto payroll in companies could go a long way in ensuring a more crypto-friendly society. While there are many advantages of paying employees via cryptocurrencies, there are a few demerits too. However, if the recipient has an understanding of the market and regulations, the downside shouldn’t discourage them from adopting cryptocurrencies on a wider scale.

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Gaurav Agrawal

Gaurav Agrawal

Telegram @gaurav_zen , Editor — Coinmonks publication (medium.com/coinmonks) and working on (https://coincodecap.com)