Imagine receiving your paycheck in crypto such as USDC or Bitcoin. In recent years, this has become a reality for many employees, as companies are increasingly opting to pay their employees in crypto.
This shift towards crypto payroll in the corporate world is driven by the rapid adoption of blockchain and digital currencies, which are seen as a legitimate and innovative form of payment.
Notably, Miami Mayor Francis Suarez has been a vocal proponent of Bitcoin adoption in the US. He proposed that the city should accept Bitcoin as payment for fees and taxes, and advocated for the use of blockchain to improve transparency and efficiency in local government.
There has also been a growing trend of athletes receiving salaries in crypto. In the world of professional sports, several high-profile athletes have publicly endorsed crypto. For example, NFL player Russell Okung announced that he would be receiving half of his $13 million salary in Bitcoin. Other athletes have also expressed interest in receiving crypto as part of their salaries, including NBA player Klay Thompson and MMA fighter Jon Fitch.
Crypto payroll companies are gaining momentum due to the growing acceptance of crypto as a credible payment method. As a worker in cryptocurrency business, getting paid in crypto has the potential for long-term investment opportunities and price appreciation associated with holding crypto.
Why companies use crypto payroll
One of the main reasons for the rise of crypto payroll companies is the cost-effectiveness and efficiency it offers. With traditional payroll systems, there are multiple intermediaries involved in the process, including banks, payment processors, and other third-party services.
For example, if you are in the US and want to pay an employee in the UK, you could be charged a $25 flat fee for a wire transfer and additional fees adding up to 7%. These fees are often shared between banks involved in the transaction, and exchange rate fees can also apply. Additionally, there can be delays in the processing of the transaction, with the receiving bank possibly not even registering it until a week later.
With crypto payroll, transactions can be processed directly on the blockchain, eliminating the need for intermediaries and reducing costs. Cross-border transactions can be made quickly and easily without the need for currency conversions and fees. They are processed almost instantly, compared to several days for traditional payment methods. This provides greater accessibility for distributed teams, especially those that operate across different countries and currencies.
Another advantage for companies that pay in crypto is to hedge against currency risk. When a company pays its employees in a foreign currency, it's exposed to the risk that the value of that currency will decline relative to the company's home currency. By paying salaries stablecoins like USDC, companies can mitigate this risk. For instance, the value of the Japanese yen has fallen more than 25% against the US dollar since 2021.
Companies that pay in crypto can pay their employees in their preferred currency, regardless of their location, which can lead to higher levels of employee satisfaction and retention.
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