About one-third of Millennials and Gen Z are happy to receive 50% of their payments in Bitcoin or other cryptocurrencies. Survey shows that some are even banking on crypto to support them in their retirement.
More than a third of millennials (aged between 26 and 42) and half of Gen Z (aged 25 and below) would be happy to receive 50 percent of their salaries in Bitcoin or any other crypto, according to a global poll by financial consultancy deVere Group.
In another survey of 800 US employees by SoFi and Workplace Intelligence, it was revealed that 42 percent of employees would like to receive non-fungible tokens (NFTs) as performance rewards. Another recent survey of 4,000 people by Investopedia found that 28 percent of millennials are planning to rely on their cryptocurrencies to support them after retirement.
JP Richardson, the CEO of Exodus, a crypto wallet platform, gets paid in Bitcoin along with his 270 employees. American football stars like Aaron Rodgers and Odell Beckham Jr. also take at least a portion of their salaries in Bitcoin. One of the top 10 UFC fighters, Matheus Nicolau, also signed a contract to be paid entirely in Bitcoin, which, he said, is to secure his future.
“Employees want more flexibility, and they want autonomy in all aspects of their work life. Being paid in cryptocurrency is an extension of this shift,” Phillip Bauknight, chair of the Fisher Phillips Cryptocurrency and Blockchain Taskforce, said in the FOX Business report.
With such big names backing Bitcoin paychecks, it’s then no surprise that millennials and Gen Z aspire the same. With the trend picking pace, here is a look at the pros and cons before opting for cryptocurrencies as salary payments.
Cryptocurrency payments do not rely on banks or any other financial/government institution. They run on decentralised peer-to-peer systems and transactions can be realised and settled almost instantly.
Tax saving, or not
Depending on the tax laws on crypto in your country, you may be able to save taxes. For instance, Portugal is a crypto tax haven with 0 percent tax on Bitcoin, on the other hand, tax on cryptos is harsh in India with 1 percent TDS and income from cryptos taxed at 30 percent.
As opposed to cash, the value of cryptocurrencies fluctuates. Thus, payments in the cryptocurrency have a better chance of delivering more value in long term than cash.
The fluctuation occurs both ways, with chances of depreciation as well. In that case, employees may end up getting less than what they were paid. The swings occur without warning and may leave employees underfunded.
Cybersecurity threats are rampant and will remain so long as cryptos are popular. Therefore, due to frauds and scams, employees may lose all digital assets. Choosing a platform that offers high security and insurance against fraud is important.
Acceptance and compliance
For making salary payments in crypto, employers need to ensure that they follow the country's law. Crypto laws vary widely, and inconsistency in rules and terminology can be a barrier to setting up global cryptocurrency payroll services and ensuring that salary payments comply with local legal and tax requirements. If gross vs net pay and taxes owed are miscalculated, businesses can get fined or dragged into legal cases.