The United States has started to popularize and normalize a new trend: crypto payrolls and receiving salaries in crypto. This is especially true for a certain group of professional athletes, including Russell Okung, Aaron Rodgers, and Saquan Barkley, as well as two US politicians, New York City Mayor-elect Eric Adams and Miami Mayor Francis Suarez, who both announced they would take their upcoming paychecks in Bitcoin.
A New Discussion: Should I Get Paid In Bitcoin?
These headlines have stirred up a new discussion among the public: should I get paid in crypto and Bitcoin? This is a legitimate conversation to have, especially as economic crises worldwide have hurt employment, suppressed wages, exacerbated income inequality, and increased inflation. Moreover, as cryptocurrencies, most notably Bitcoin, have attracted the government and central bank’s attentions, the prospects of increasingly legitimizing Bitcoin payments look ever brighter. This can be seen through El Salvador’s move to establish Bitcoin as legal tender.
Moving forward, these moves by athletes, politicians, governments, and central banks will speed up the trend of people asking if they can get paid in Bitcoin.
Laying The Foundation: Is It Possible To Get Paid In Crypto?
For employees to officially receive their salaries in crypto, the businesses that employ them must accept Bitcoin and hold cryptocurrencies on their end. This is where a lot of the bottlenecks are present. In addition, the number of companies that have Bitcoin reserves and hold cryptocurrencies on their balance sheets remain in the single digits.
Both of these situations are reasonable, given that laws in the US and elsewhere require employers to pay wages in “legal currency,” and because shareholders and board members of public and private companies may not approve Bitcoin and cryptocurrency-related investments.
These are the three primary reasons why companies do not pay salaries in crypto, and they are mainly logistics, compliance, and business reasons.
How To Get Paid In Bitcoin?
At the moment, the only way for employees to receive their salaries in Bitcoin is through conversion. Essentially, people can receive their base salary in their local currency and then personally exchange it for cryptocurrencies (or Bitcoin) on a central exchange of their choice.
However, companies like Coinbase and Strike are exploring options to allow people to either deposit their paychecks onto these platforms or instantly convert their paychecks into the original cryptocurrency. But these two methods are identical to buying cryptocurrencies directly using money and are thus different than accepting the cryptocurrency salary payment in crypto from your employer. As mentioned above, this latter option will take some time to develop since it requires major business decisions and reform, as well as more clarity on tax and compliance.
Famous People Who Get Paid In Bitcoin
Despite the difficulties of getting paid in crypto, there are growing instances of athletes and politicians receiving their salaries in Bitcoin.
Athletes Who Get Paid In Bitcoin
The first notable example is current free-agent and former NFL Carolina Panthers offensive lineman Russell Okung, who famously decided to convert half of his salary to Bitcoin starting in December 2020. Initially, he requested the Panthers to pay him in Bitcoin, but the NFL intervened and stated teams can not pay players in Bitcoin, and that they can only be paid in US dollars.
Second, is former NFL MVP and current quarterback of the Green Bay Packers, Aaron Rodgers, who announced in November 2021 that he is partnering with the Cash App to convert a portion of his salary into Bitcoin.
In addition to these two athletes, others like New York Giants running back Saquan Barkley have made similar announcements. In particular, Saquan said he will be converting his marketing money into Bitcoin.
Interestingly, we can see that all these instances do not involve direct Bitcoin payments in the form of salary, but rather “getting paid in Bitcoin” by converting one’s cash salary into Bitcoin. Therefore, it is merely buying cryptocurrency with your salary, which is different than getting paid directly in cryptocurrencies, such as Bitcoin.
Politicians Who Get Paid In Bitcoin
Outside of the sports world, politicians are also getting more involved in exploring and popularizing crypto salaries and Bitcoin payments. Miami Mayor Francis Suarez and New York City Mayor-Elect Eric Adams both announced they would be receiving their “paychecks” in Bitcoin. However, the details remain unclear given that the United States government does not pay employees in cryptocurrency. Therefore, it still remains the case that these individuals will merely convert their US dollar salaries into Bitcoin. But obviously, these transactions will be only visible to them and thus impossible to verify the particular investment details. Hence, it appears that these Bitcoin payment headlines are not in fact contractual Bitcoin payments, but rather announcements that the politicians will purchase Bitcoin with their salaries, which is identical and no more special than making a standard investment in the cryptocurrency.
Does It Make Sense To Pay Salaries In Bitcoin?
The NBA’s Sacramento Kings announced in April 2021 that they would offer a Bitcoin salary option to all players and staff. However, it still remains unclear how the team will facilitate those payments. General Manager of the Dallas Mavericks, Mark Cuban scoffed at the plan and said that “players at any time can choose to convert their salaries into Bitcoin, and that paying in BTC or crypto doesn’t really do anything.” This makes sense since generally investors in Bitcoin prefer to hold on to their Bitcoin, especially as the asset has gone from less than $10,000 in price to over $60,000 in under three years.
Therefore, if employers were to give away Bitcoin to their employees, and the Bitcoin triples in value, then the company would lose substantial revenue, which could affect their bottom line.
What Companies Are Paying Employees In Bitcoin?
Because of the burgeoning interest in cryptocurrencies, companies like BitWage, Strike, Choice, BitPay, and Coinbase, have all opened pathways for crypto payroll services. However, because cryptocurrencies are decentralized and the money transfer process is direct, all the employee needs is a wallet address, which would provide the company with a location to send the money. Therefore, it is more complicated for the company’s HR, compliance, and finance departments to make this transition from processing traditional salary payments to establishing a whole new crypto infrastructure.
Bitcoin payments through salary are still a few years away. This is because of lack of clarity on tax and compliance, as well as general market volatility. Moreover, because cryptos are relatively young, companies and businesses alike are hesitant to begin adopting on a major scale. Companies like MicroStrategy are an outlier on this scale. But moving forward, as cryptocurrencies increase in popularity and people begin adopting them in greater numbers, getting paid in crypto could become a not so distant reality.
If, like many hardcore Bitcoiners, you believe it is only a matter of time before crypto goes mainstream, you can directly buy Bitcoin to start stacking some sats.