What's Stopping Employers Paying With Cryptocurrency?

blockchainboom (40)in #blockchain • 7 years ago

The Prospect of Paying With Cryptocurrency

For many companies using Bitcoin or other cryptocurrencies for paying their employers is impractical and not possible due to regulatory standards. There are a few companies in certain countries that pay their employees that way however, such as G.M.O Internet of Japan who allows workers to receive $890 of their monthly pay in virtual currency. But there still remains many economic and regulatory hurdles that are preventing cryptocurrency being a viable payment option.

All U.S companies are enforced by law that people be paid only in cash or cheque as they are both representations of fiat currency and therefore comply with financial regulations as they are legal tender. The Fair Labour Standard Act means that as Bitcoin and other cryptocurrencies remain as yet unclassified as having economic value businesses can't pay you with them. This however could be changing dramatically over the next year as can be gauged from yesterday Senate Banking Committee meeting. Higher cooperation between government and baking institutions will regulate the market to enhance adoption alongside increasing patents being developed will see cryptocurrencies be legal tender by at least 2020.

An assumption for this is because of the S.E.C's apparent intention to consider Bitcoin and other cryptocurrencies as securities and they would then therefore be compliant with national financial regulations. There is still the prospective problem of intense volatility in the market, which is causing many employers considering the switch to crypto to hold back. Pressure may be felt financially if prices were to fall, potentially leaving employees to be unhappy with fixed rate payment of a cryptocurrency. If employees were to demand the same dollar equivalent of cryptocurrency each month if it was declining, businesses would have to account for higher outputs of cryptocurrency.

Hopeful Outlook

Tax implications are another headache for the companies considering using cryptocurrencies too as it would be logistically inefficient to pay them. As BTC earnings and payment have to be recorded in their $ amount, it means that it would be time consuming and complicated for businesses to determine appropriate figures. But more positive government involvement in the market will ensure that cryptocurrencies become more economically viable and legally compliant in the future. And there are many new technologies and applications like cryptobanks that will enable a new ecosystem of cryptocurrency to revolutionize finances. This is a progression that would be very valuable to the most adaptive and applicable virtual currencies.