by Stephen Payer, Co-Founder and CEO of bitpay
The rise of cryptocurrencies has started a new trend in employee compensation. Businesses around the world are beginning to give their employees the option of receiving payments in bitcoin, ethereum, and other digital currencies.
The idea of cryptocurrency as part of a benefits package is straightforward: In addition to fiat currency, an organization pays its employees with a cryptocurrency such as bitcoin (BTC). It can be implemented in a number of ways, either in place of a regular salary, bonus, one-time gift or 401k matching plan. Employees can choose to allocate a portion of their weekly or monthly earnings to any digital asset of their choice, and it is instantly reflected in their wallet.
While the mainstream may view cryptocurrency as an investment, individuals and businesses alike continue to adopt it as an alternative form of payment, whether to purchase consumer goods or pay employees. Internal Bitpay data shows that crypto payments have more than tripled over the past several months.
Integrating cryptocurrency into an organization’s benefits package brings benefits to organizations and employees alike.
From a branding point of view, paying in crypto shows that an organization is looking towards the future and modernization. Cryptocurrency users are often young, digitally savvy, and high-income earners. Adding new and attractive benefits like crypto payroll can help entice star-prospects into a competitive field. In addition to recruiting benefits, sending cryptocurrency payments is cost-effective, a huge advantage especially for organizations with remote workers around the world. It may even be faster than ACH deposit.
For employees, receiving crypto in their payroll provides more ways to diversify their investments. Receiving payments in crypto allows employees to receive cryptocurrency versus dollars and bypass transaction fees by purchasing cryptocurrency after payroll. the current crypto winter This makes it a great time to acquire and hold through a dollar-cost averaging strategy.
Organizations will typically have two ways to incorporate crypto into benefits packages: the “hands-on” approach and the “hands-off” approach.
- hands on – In an on-hand approach, an organization will handle all aspects of its cryptocurrency profits. This includes creating a wallet, purchasing and holding cryptocurrency, sending it to employee wallets, and maintaining compliance with any local cryptocurrency regulations.
- stay away The hands-off approach is very simple, wherein an organization partners with a trusted payment processing company. In this scenario, no cryptocurrency knowledge is necessary. Organizations never need to touch or hold cryptocurrencies. Instead, an account is funded in fiat, which the payment processor partner then converts to cryptocurrency and distributes to employees. Similar to traditional payroll providers, crypto payment processors handle all logistics and compliance concerns. For these reasons, it is often a more popular way to integrate cryptocurrency into existing benefits packages.
Once a company has made the decision to integrate cryptocurrency into their existing benefits package, there are a few considerations to keep in mind. Choosing a trusted, reliable payment processor partner taking advantage of a “hands-on” approach is paramount. In the crypto world, companies are very small. it is important to consider a Payment partners with proven expertise in the payments industry with solid references,
Organizations should consider what digital assets they will make available to employees. Currently the most widely used cryptocurrency for payouts is bitcoin. However, Litecoin (LTC) and Dogecoin (DOGE) are two additional cryptocurrencies gaining prominence as preferred payroll options. Stable coins such as USD Coin (USDC) are becoming more popular and could make up a significant portion of crypto payrolls in the future. Stablecoins allow employees to be a little more price aware when purchasing cryptocurrency or other digital assets. Therefore, employees can receive their salaries in the stablecoin and convert it to Bitcoin (BTC) if they wish. Furthermore, stable coins are much easier to spend, as they eliminate the complexity of tracking capital gains for each purchase.
Overall, integrating cryptocurrency into an organization’s benefits package is an innovative and attractive way to compensate employees while embracing the digital future. Various advantages such as cost-effectiveness, ease of use and modern appeal are well worth the relatively low barrier to entry. Paying in cryptocurrency could help attract top talent, especially among young, tech-savvy, high-earning individuals. It’s also a faster way to run payroll across borders, making it a huge advantage for companies with remote workers. The most seamless way of integration is to choose a proven payment processor partner that will not only handle crypto payments but also ensure that organizations stay in compliance with ever-evolving cryptocurrency regulations.
Overall, leveraging crypto as an employee benefit should not be viewed as an “all or nothing” move, but instead as another tool for leaders to entice, engage, and reward teams. .
Stefan Payer is the co-founder and CEO of Bitpay, the world’s leading provider of blockchain payment technology.
The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.