The pros and cons of getting a crypto paycheck
Despite the crypto market’s rocky performance this year, a growing number of employees are wanting to be paid in alternative assets. According to research from SoFi, more than one-third of workers would like to receive a portion or all of their paycheck in cryptocurrency, and over 40 per cent like the idea of bonuses and rewards in the form of NFTs.
This could be a result of celebrities and politicians of late opting to claim their salaries in digital currency. For several months now, NFL star Aaron Rodgers and football player Odell Beckham have been paid their millions in Bitcoin. And in the world of politics, New York City mayor Eric Adams had his first paycheck converted into BTC and Ether.
But is this a good idea for the average worker? Let’s take a look at the pros and cons.
Payment in cryptocurrency is instant – no need to wait for lengthy bank transfers. The middleman is cut out, and employees will no longer experience a delay with clearing checks and pending deposits.
Cryptocurrency is an investment, and one with very high growth potential. While there is another side to the coin, digital currencies are attractive to many because they can yield serious returns compared to other asset classes.
Avoiding transaction fees
In 2022, transaction fees average around 2 per cent per swipe. And that’s in addition to flat fees of around 10 cents per transaction. Crypto, on the other hand, rarely carries fees for moving money around.
It’s no secret that the crypto market is volatile – Bitcoin is down almost 40 per cent year-to-date. Employees might wake up to find that yesterday’s paycheck has slumped considerably overnight.
Potentially high taxes
While tax laws on cryptocurrency vary around the world, some countries are working under sky-high fees for transactions. In India for example, a 30 per cent tax on income from crypto has recently been implemented.
With cybercrime on the rise, it’s important to consider the potential risk of holding untraceable assets. These threats aren’t unique to cryptocurrency, although they are becoming increasingly apparent and more sophisticated. Issues of cybersecurity are especially worth considering for less tech-savvy crypto holders.