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In April 2020, unemployment in the U.S. was at “the highest level on record,” followed by nearly record-low unemployment in 2022. There’s also a record high of two open jobs for every unemployed person, which is driving fierce competition for talent. Some firms are turning to cryptocurrencies to sweeten the pot.
Offering salaries in cryptocurrency isn’t new, but it’s becoming more common as companies attempt to lure top talent. In 2017, Japanese internet company, GMO, announced that it would pay part of its employees’ salaries in bitcoin, and it is joined by the likes of SC5, Fairlay and io.
Why offering crypto payroll is a meaningful perk
A tremendous 56% of American adults (around 145 million people) own or have previously owned crypto. To offer salaries denominated in cryptocurrency is to appeal to a much wider swath of the population. What’s more, young people are particularly bullish on crypto. A recent survey found that buyers in the Gen Z and millennials buckets make up nearly 94% of all crypto buyers.
Offering cryptocurrency as a payroll option is a way for companies to tap into this enthusiasm and signal that they’re forward-thinking when it comes to new technologies. It’s also a way to attract employees who might be interested in working for a company that is comfortable with and supportive of cryptocurrency.
Paying salaries in cryptocurrency comes with some risks, of course. The value of digital assets can be volatile, and so a worker who is paid in crypto could see his or her earnings fluctuate wildly from month to month. For this reason, it’s important for companies to consider whether they’re prepared to offer salary protection in the form of cash top-ups or other benefits if the value of crypto falls.
Employees may want to get paid in crypto for a number of reasons, from the potential for appreciation to the simple fact that it’s a more convenient way to hold and use digital assets. But regardless of the reasons, companies that want to stay ahead of the curve would do well to consider offering crypto payroll options. It could be the key to attracting and retaining top talent in today’s competitive landscape.
Crypto payroll is beneficial for employers, too
In addition to the ability to attract top talent, there are a number of reasons why paying salaries in cryptocurrency could be beneficial for employers.
For one, it can help companies save on costs. Cryptocurrency transaction fees are generally lower than those associated with traditional payment methods like wire transfers or credit cards, particularly for cross-border payments.
In addition, crypto payroll can help firms hedge against currency risk. If a company pays its employees in a foreign currency, it is exposed to the risk that the value of that currency will decline relative to the company’s home currency. By paying salaries in cryptocurrency or stablecoins like USDT, companies can hedge against this risk. For example, the value of the Japanese Yen dropped over 20% against the U.S. dollar (or the stablecoin equivalent, USDT) this year.
Last but not least, crypto payroll can give companies a competitive edge when it comes to speed and efficiency. Cryptocurrency transactions are generally much faster than traditional payments, which means employees can get access to their earnings more quickly. And because digital assets can be stored and used electronically, there’s no need for paper records or checks (which can often get lost or delayed in the mail) — everything is stored securely on the blockchain.
How to offer crypto payroll
If you’re interested in offering crypto payroll to your employees, there are a few things you need to consider.
First, you’ll need to decide which cryptocurrency or cryptocurrencies you want to use. There are thousands of different digital assets in existence, so it’s important to do your research and consider what makes the most sense for your company.
For example, if you want to offer employees the ability to hold and use their earnings easily, you might want to consider a major cryptocurrency like bitcoin or Ethereum. If you’re more interested in hedging against currency risk, a stablecoin like USDT could be a good choice.
Once you’ve selected a cryptocurrency, you’ll need to set up a way to pay salaries in that currency. The naive approach would be to simply ask employees to provide you with their cryptocurrency wallet address and manually transfer the appropriate amount each month. But this is time-consuming and exposes you to the risk of human error.
Another option is to use a crypto payroll service. This not only saves you time and reduces the risk of error, but it also makes it easy for employees to receive their earnings directly into their own wallets or exchange them for other currencies if they so choose.
Ultimately, offering crypto payroll is a way to stay ahead of the curve and attract top talent. If you’re interested in doing so, there are a number of things you need to consider. But with the right preparation, it could be a major competitive advantage for your business.