‘It really helps people to get paid regardless of where they are, in a way that’s speedy’
For companies looking to expand their talent search efforts and hire people from around the world, paying them with cryptocurrency such as Bitcoin has its advantages, according to one expert.
Because it is a new, globally recognized currency that can be transferred almost instantly, payment gets to the right place quickly and securely, says Alex Bouaziz, cofounder and CEO of Deel in San Francisco.
An employer pays employees through its platform and then the workers can get paid however they want, including Bitcoin or Ethereum, he says.
“The idea that you can get your funds, regardless of the currency that you were paid into, in a couple of minutes in a fraction of the cost of what it would mean to make a swift transfer, it’s pretty game-changing for a lot of people.”
“It really helps people be able to get paid regardless of where they are in a way that’s speedy, and in a way that makes sure that they can pay rent on time,” he says.
Bitcoin can also be viewed as a potentially high-return investment, says Bouaziz.
“A lot of people in this market, they love the idea of owning cryptocurrencies. From a speed perspective, it gets there really, really fast; from an investment perspective, from a transaction-cost perspective, getting your money in BTC [bitcoin] or in Ethereum is very, very efficient.”
However, the volatilities of the bitcoin market may scare off some employers and employees, he says.
“[It] can be a positive or negative… when you take your funds, obviously, the money is quite volatile in those currencies: you’re getting $4,000 but 10 minutes later, that might be $4,300 or that could be $3,500. There’s some aspects of volatility to the currencies today that needs to be considered when you’re signing a contract.”
For employees who are paid in cryptocurrency but still need to pay for local expenses such as food and shelter, companies such as Coinbase or Binance can help do an exchange, according to Bouaziz.
Alex Bouaziz
“They give you the ability to switch your crypto into cash at any point and bring it into your bank account.”
Some foreign workers might not know how to declare these types of payments so good advice is key, says Bouaziz.
“As a freelancer, as a contractor, you have to know how to report your taxes in your country when you get paid in bitcoin cryptocurrency. This is something that’s pretty new for a lot of countries so knowing how to do it right and fining the right accountants or tax advisers is a pitfall.”
Despite its somewhat mysterious nature, bitcoin is growing in acceptance, says Bouaziz.
“Crypto adoption has been better and better; there’s more and more companies that have looked into it. You’ve got companies like Tesla that are holding cryptocurrency or Bitcoin in their balance sheet because they believe in the value. It is like a new form of gold and in a very limited supply currency as well.”
Meanwhile, pandemic pay cuts continue to be felt by many employees, according to a new survey, and millennials and Gen Z workers are most worried about their finances than any other generation, found a study.
