History has been made! Last month, El Salvador became the first country in the world to make Bitcoin legal tender (local currency). Paraguay is expected to be next. Elsewhere in the world, cryptocurrencies are not yet seen as money, but - just like silver or gold - as assets.
So, what do I need to know? The employment laws of many countries around the world allow companies to pay workers in assets or other non-cash forms. But...
· There are usually limits placed on what percentage of a salary can be paid in non-cash form.
· It’s important to consider the volatility of cryptocurrencies. The fluctuating value means that the amounts you’re paying in cryptocurrency would need ongoing oversight and adjustment.
Which companies are looking seriously at cryptocurrency payments? The early adopters are businesses that already work directly in the cryptocurrency markets. Other companies are looking at cryptocurrency as an early investment, or as a means to beat inflation, both for themselves, and for their employees.
Such as? Tesla is a big player. The innovative car company reportedly bought over USD 1.5 billion in Bitcoins and is considering accepting the cryptocurrency again – without the need for conversion into USD - as payment for its cars. Another adopter is the business intelligence company, MicroStrategy. The business reportedly owns over three billion USD in Bitcoins and uses Bitcoin to pay its board members.
What else might drive an uptake in cryptocurrency salary payments? A big driver would be the number of cryptocurrency users increasing at a fast pace. This could prompt more people to request the option to receive a percentage of their salary in a cryptocurrency.
Talk to us about employment law.
At PEO Legal, we provide legal and compliance advice for professional employer organisations and staffing companies around the world. If you want support with salary payments, or any other point of cross-border employment law, contact us, today.