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- The rising inflation has led to countries adopting cryptocurrencies as the main source of income.
- Companies are using blockchain technology to pay the salaries of their employees.
- Blockchain technology is also helping companies to source talent globally.
Cryptocurrencies are becoming popular as the main source of income in various nations. These nations are either currently experiencing hyperinflation or have had phases of financial instability. Turkey, Argentina, Brazil and parts of Africa are the countries that have embraced cryptocurrency. People in these countries are turning to cryptocurrencies due to rising inflation, says Philipp Sandner, founder of the Frankfurt School Blockchain Center.
Companies are leveraging blockchain technology to pay their employees and to source talent worldwide. Crypto assets such as Bitcoin, Ether and US dollar pegged stablecoins are proving to be a cost-effective alternative to traditional international money transfers.Sandner says that moving crypto assets yield the real benefit of blockchain technology. Individuals who are working in a foreign country are particularly finding digital assets useful. Besides, a significantly larger talent pool becomes accessible to employers.
Although there are various advantages of paying in cryptocurrencies, it also has downsides to it. Employees living in regions with strict crypto regulation will not be able to receive crypto salary payments. In 2018, the U.S again imposed sanctions on Iran. Meanwhile, Binance, a leading crypto exchange, has provided services to Iranian crypto-traders. However, there is proof that sanctioned individuals used Binance. Iranian clients if, as a result of transacting, dodge the US trade embargo could harm Binance. Recently, China has banned salary payments in the forms of USDT. The reason provided was that digital currencies are not given the same legal status as legal tender.
Meanwhile, in the U.S crypto paychecks occupy a middle ground. The IRS describes cryptocurrencies as “properties.” The profit made from buying or selling cryptocurrencies is subjected to capital gains taxes. The market cash value of the currency you were paid must reflect on the payment day. The value of the currency will be based on the value of the cryptocurrency that the user chooses to pay in.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
