Crypto awareness and possession rates are rising by leaps and bounds, having touched record marks this year. In 2023 only, 30% of American grown-ups were estimated to own some form of crypto, according to Security.org, an expert in personal and home security. Now, the number has risen to 40%, a portion of the increase attributed to the rising hybrid payroll trend and the commonality of receiving crypto as remuneration for services like freelancing writing and video editing. Today, it’s more common than ever to get Bitcoin, Ethereum, Solana, and other popular cryptos in turn for online services that go beyond what one does within a registered company. If you want to transact in crypto and have a sought-after skill, you no longer need to buy Ethereum with credit card as your only option to engage in crypto transactions. You can simply emphasize that you accept being reimbursed in digital currency when it comes to negotiating job offers with companies willing to offer this type of payment or in online freelancing activities.

Some individuals prefer getting their salaries paid in crypto, with a 2022 CNBC study disclosing that over a third of millennials and 50% of zoomers would wholeheartedly take these tokens as half of their pay. With the crypto salary and hybrid payroll movements stealing the spotlight, how should you approach the expanding trend? Let’s read on to discover this trend’s main pros and cons so you can make the best decision! 

Understanding the crypto payroll system

Since it’s a relatively novel concept, it’s important to shed light on what crypto payroll systems entail. This practice refers to offering contractors or employees Bitcoin, Ethereum, or stablecoins as pay and has emerged and risen in popularity and mainstreamness together with cryptos’ rising fame. Adoption rates are spiking, with more and more firms presenting the crypto payroll offer to possible or existing employees, even if such trends are limited to the crypto and blockchain space. Blockchain.com is one of the most prominent examples of paying in crypto. Parallelly, the number of expert cryptocurrency payroll providers is also surging, enabling more workers to obtain crypto for their duties.

One of the most common ways to offer and take crypto is for the business to direct crypto amounts straight into the worker’s e-wallet. Another option is to finance a worker’s crypto exchange account, but this alternative comes with a fee from the service provider that may reduce the pay received. Now that you know how crypto payroll systems roll, let’s discover the pros and cons of functioning as tiebreakers. 

Navigating the advantages 

Financial liberty 

Among the strongest suits to crypto pays is the decentralized nature of cryptocurrencies. These work on top of blockchains and remove the need for the involvement of banks and other go-betweens, which would otherwise come with budget-wrecking fees. At the same time, you enjoy more control over your funds since financial institutions have no involvement in these transactions. Transfers are accessible, affordable, and functional all around the clock, and the economic freedom brought by decentralization is clearly a draw for many employees.

International accessibility 

Cryptos defy geographical limitations and barriers, allowing users to take payments anywhere globally. This possibility is all the more beneficial for remote employees and freelancers who may face difficulties with the traditional cross-border payment system. All an employee must have is internet and access to a digital wallet, the latter of which shouldn’t pose challenges. You choose a reliable crypto exchange and receive money in the platform’s offered digital wallet or simply set up an e-wallet on your own.

Lower costs

Paralleled with old-school, traditional banking methods, cryptocurrency transactions generally involve reduced fees. This decrease in transaction charges may be particularly attractive for people who regularly transfer funds and make cross-border transactions. Crypto exchanges typically charge a fee for transfers, but the fee differs depending on many factors, such as the platform in question and the amount of money sent. 

Exploring the challenges 

Price volatility

One of the most pressing difficulties when it comes to receiving crypto as pay is their prices’ known volatility, translating to a somewhat unstable income, unless a well-defined pay structure is followed. Cryptocurrencies are famed for the rapidity with which their prices can climb or drop. Even if this volatility is appealing for those looking to cash in on sudden price movements, it would be wrong to assume that workers can leverage it too much. Possibly, you don’t want to engage in trading, or you may want to keep your crypto on the long term and review prices every now and then to know where your wealth is heading. The value of your crypto may fluctuate considerably within a short timeframe, resulting in uncertainty concerning the buying power of your obtained funds. 

Taxation difficulties

The taxes you may need to pay after receiving crypto could take a chunk of your funds, so you should do the math before accepting such an alternative. At the same time, the red tape surrounding crypto payrolls and pay can be tricky and complicated, to say the least. In this situation, you may need to work with an expert accountant and learn how your state treats crypto possessions. Tax implications generally differ by region, but more often than not, people need to report their digital currency income with accuracy and be aware of capital gains. Importantly, this rule also applies if you simply decide to exchange your cryptocurrency income for fiat.

Merchant acceptance 

Despite the rising number of merchants taking crypto for their offerings, the fact that your local shops or markets lag regarding this innovation may probably make it difficult for you to spend your crypto on regular purchases. Mammoths like McDonalds, Starbucks, KFC, Wikipedia, Microsoft, and others accept cryptocurrency, but they’re not establishments where you make everyday payments. As expected, you should check the retailers offering their products and services for crypto if you plan on giving your tokens away for such acquisitions. This is all the more pertinent if you don’t want to limit your spending ability on big-ticket goods and services that occur once in a blue moon. 

What’s your stance on this, and what could convince you to accept crypto? Should you be sleeping on this idea or leaping?