Payment with Bitcoin and Crypto: A New Trend?
The United States has begun to popularise and mainstream a new trend: crypto payrolls and salary payments in cryptocurrency. This is especially true for a group of professional athletes, such as Russell Okung, Aaron Rodgers, and Saquan Barkley, as well as two US politicians, New York City Governor Eric Adams and Miami Governor Francis Suarez, who both announced they would accept Bitcoin as payment for their upcoming salaries.
A New Debate: Should I Be Paid in Bitcoin?
These articles have sparked a fresh public debate: should I get compensated in crypto and Bitcoin? This is a valid discussion to have, especially given how global economic crises have harmed employment, lowered wages, exacerbated income inequality, and boosted inflation. Furthermore, since cryptocurrencies, most notably Bitcoin, have captured the attention of the government and central banks, the possibilities of gradually legitimising Bitcoin payments appear to be improving. This may be demonstrated in El Salvador’s decision to make Bitcoin legal money.
These initiatives by sportsmen, politicians, governments, and central banks will accelerate the trend of individuals asking whether they may be paid in Bitcoin in the future.
Laying the Groundwork: Can You Get Paid in Crypto?
Employers must accept Bitcoin and retain cryptocurrencies in order for employees to get their salary in cryptocurrency. This is where the majority of the bottlenecks are. Furthermore, the number of corporations with Bitcoin reserves and cryptocurrencies on their financial sheets is still in the single digits.
Both of these scenarios are understandable, given that regulations in the United States and elsewhere compel firms to pay employees in “legal cash,” and that shareholders and board members of public and private corporations may not authorise Bitcoin and cryptocurrency-related investments.
The three main reasons why corporations do not pay wages in cryptocurrency are logistical, compliance, and commercial considerations.
Celebrities Who Get Paid with Bitcoin
Despite the challenges of being paid in cryptocurrency, there is an increasing number of sportsmen and politicians earning their salary in Bitcoin.
Athletes who are compensated with Bitcoin
The first significant example is current free agent and former NFL Carolina Panthers offensive lineman Russell Okung, who notably elected in December 2020 to convert half of his salary to Bitcoin. He first demanded that the Panthers pay him in Bitcoin, but the NFL intervened and ruled that clubs cannot pay players in Bitcoin and must instead pay them in US dollars.
Second, Aaron Rodgers, current quarterback of the Green Bay Packers and former NFL MVP, stated in November 2021 that he is teaming with the Cash Foundation.
Other players, such as New York Giants running back Saquan Barkley, have made similar disclosures. Saquan, in particular, stated that he will convert his marketing funds into Bitcoin.
Interestingly, all of these examples entail “being paid in Bitcoin” through changing one’s cash paycheck into Bitcoin, rather than direct Bitcoin transfers in the form of wages. As a result, it is just purchasing cryptocurrency with your paycheck, as opposed to being paid directly in cryptocurrencies such as Bitcoin.
Politicians who are compensated with Bitcoin
Politicians are also becoming more active in studying and popularising crypto wages and Bitcoin payments outside of the sports industry. Miami Mayor Francis Suarez and New York City Mayor-Elect Eric Adams both indicated that their “paychecks” will be issued in Bitcoin. However, the specifics are unknown because the US government does not pay personnel in cryptocurrencies. As a result, these individuals will continue to simply transfer their US dollar salary into Bitcoin. However, these transactions will be available only to them, making it hard to check the specific investment information. As a result, it appears that these Bitcoin payment headlines are not contractual Bitcoin payments, but rather announcements that politicians would acquire Bitcoin with their salary, which is the same thing.
Does Paying Salaries in Bitcoin Make Sense?
The Sacramento Kings of the NBA announced in April 2021 that all players and staff will be paid in Bitcoin. However, it is still unclear how the team will make those payments. Mark Cuban, General Manager of the Dallas Mavericks, sneered at the concept, saying that “players may opt to change their paychecks into Bitcoin at any moment, and that paying in BTC or crypto doesn’t actually do anything.” This makes sense given that most Bitcoin investors want to hang on to their Bitcoin, especially given that the asset’s price has risen from less than $10,000 to over $60,000 in less than three years.
As a result, if employers distributed Bitcoin to their employees, if the value of Bitcoin triples, the corporation will lose significant income, potentially affecting its bottom line.
What businesses pay their staff in Bitcoin?
Companies such as BitWage, Strike, Choice, BitPay, and Coinbase have all opened doors for crypto payroll services as a result of the growing interest in cryptocurrencies. However, because cryptocurrencies are decentralised and the money transfer procedure is direct, all the employee requires is a wallet address, which gives the firm a location to send the money. As a result, the change from processing regular wage payments to constructing a completely new crypto infrastructure is more difficult for the company’s HR, regulatory, and finance departments.
Bitcoin wage payments are still a few years away. This is due to a lack of understanding around tax and regulatory issues, as well as regular market volatility. Furthermore, because cryptos are still in their infancy, organisations and enterprises alike are cautious to initiate widespread adoption. MicroStrategy, for example, is an anomaly on this scale. However, as cryptocurrencies gain popularity and more people use them, getting paid in cryptocurrency may become a reality in the not-too-distant future.