There is no denying that with the great resignation, workers are better able to find what they want out of their jobs.
Other than flexibility and better benefits, a new feature in the workplace is gaining popularity – Digital currency payment option.
According to a global survey by financial consultancy deVere Group, cryptocurrencies could become more and more popular in salary negotiations with younger workers.
The study revealed that more than a third of Millennials (those between the ages of 26 and 42) and half of Generation Z (25 and under) would be happy to receive half their salary in the form of bitcoin or other cryptocurrency.
Cryptocurrency is a digital asset that uses computer code and blockchain technology to operate somewhat on its own, without the need for a central party to manage the system.
Another survey, conducted by SoFi at Work and Workplace Intelligence of 800 American employees, showed that 42% of them would like to receive non-redeemable tokens as rewards for performance.
Non-fungible tokens, or NFTs, are unique assets that are verified and stored using blockchain technology – a digital ledger similar to the networks that power cryptocurrencies.
Getting paid in digital currency is undoubtedly “fashionable,” said Tony Jarvis, director of enterprise security for Asia Pacific and Japan at cybersecurity startup Darktrace.
And he added, “Providing salaries to your employees with Bitcoin can be a way to attract what we would call ‘forward-thinking workers,’ especially if you work in certain industries, such as FinTech.”
In fact, SharpRank is one of the companies offering cryptocurrency payments in an effort to attract younger workers. It is an independent rating agency that works with college students who work As brand ambassadors.
Founder and CEO Chris Adams likened the allure of cryptocurrency among young people to “When Starbucks first became popular, it was important to watch with a Starbucks cup.”
“It’s very similar in terms of being able to get some kind of cryptocurrency because that’s what all of their friends are talking about.”
While offering cryptocurrency as a salary has enabled companies to attract young talent, it also comes with both rewards and risks for employees. CNBC Make It takes a look at both.
1. Quick Payments
Forget waiting times, exchange fees and extra costs that come with traditional banking transactions – Jarvis said that receiving payments in cryptocurrency can be really fast, and that gives employees a level of certainty.
When your employer pays you using [digital currency], once your employer makes that payment, the next second, it’s in your account. You don’t have to wait until the next day.”
Sumit Gupta, CEO and co-founder of CoinDCX, a cryptocurrency exchange platform, said that given the growing interest in cryptocurrency among younger investors, it is not surprising that they prefer to get paid this way.
“They will immediately be able to access and hold cryptocurrencies in their portfolios, without the need to convert from fiat currencies, which results in additional transaction fees.” The term fiat money refers to physical money backed by the government.
2. Tax avoidance – or not
When it comes to cryptocurrency tax laws, the country in which you operate matters. Jarvis said some countries are “too lax” in this regard.
For example, Portugal is known as a crypto tax haven for its 0% tax on bitcoin.
“When you think about how much these assets have increased over time, they are big gains to make if you’re saving on that tax side of the equation,” Jarvis added.
However, Gupta said more countries may tighten their grip on digital assets in the near future “in an effort to boost consumer confidence and safety.”
Later this month, starting on April 18, individuals in the US will need to report cryptocurrency transactions to the Internal Revenue Service.
Gupta added that similar measures have been implemented in India, where a 30% tax is imposed on income from cryptocurrencies.
“It is important for employees who get paid in cryptocurrency to be aware of how these changes will affect the ownership and use of crypto assets… Staying abreast of policy changes can allow users to react quickly to developments,” he said.
3. Volatility: a double-edged sword
It is no secret that the cryptocurrency market is volatile.
Even Bitcoin, one of the most popular cryptocurrencies, is not immune to wild price swings – It has fallen sharply since November, falling more than 40% from a record low of about $69,000.
However, the growth in the value of bitcoin over the past decade cannot be overlooked, given that its value started with “a few dollars,” Jarvis said.
“If you’re getting paid weekly or monthly, it’s entered as a certain dollar value today and it automatically grows over time…there are some serious returns.”
For Adams of SharpRank, navigating the rise and fall of a digital currency “can be a very positive experience.”
“We see a number of kids go through cycles like this…let’s say overnight, I wake up and [cryptocurrency] Its value decreased by 500%. The first thing I will do is ask why and then I will figure out ways to make sure it never happens again,” added Adams.
“I think this is a viable skill in asset allocation and investing.”
However, owning or getting paid for cryptocurrency may not be a bad thing.
“We found that a younger age group, who may have a greater appetite for risk, tended to see risk and reward from a different perspective than someone who only really knew it was being paid with cash,” Adams said.
4. Cyber Security Threats Remain
While the cybersecurity threat is not unique to cryptocurrency, industry experts CNBC Make It said the breaches “will continue as long as cryptocurrency remains popular.”
“A lot of scammers and attackers target cryptocurrency wallets – “They use social engineering the same way we receive phishing emails,” Jarvis said.
“And if you’re not a security expert, knowing exactly how to secure these assets can be really tricky. You’re storing assets on a third-party platform, so there’s a risk there.”
Therefore, it is important to choose a cryptocurrency platform that “prioritises safety and security,” Gupta said.
“Finding platforms that provide asset insurance and barriers against money laundering will reduce exposure to risk when using digital finance.”
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Correction: This story has been updated to correct the spelling of Chris Adams.