There is no denying that with the Great Resignation, workers are more empowered to seek what they want from their jobs.
Aside from flexibility and better benefits, a new workplace fringe piece is gaining popularity – possibility to be paid in digital currency.
According to a global poll conducted by financial consulting firm deVere Group, cryptocurrencies may become more common in wage negotiations with younger workers.
More than a third of millennials (those between the ages of 26 and 42) and half of Generation Z (25 and under) would be happy to receive half of their salary in bitcoin or other forms of cryptocurrencies, the survey revealed.
A cryptocurrency is a digital asset that uses computer code and blockchain technology to function a little on its own, without the need for a central party to control the system.
Another survey, conducted by SoFi and Workplace Intelligence of 800 US employees, showed that 42% of them would like to receive non-fungible tokens as performance rewards.
Non-fungible tokens, or NFTs, are unique assets that are verified and stored using blockchain technology – a digital ledger similar to the networks that support cryptocurrencies.
Getting paid in digital currency is undoubtedly “trendy,” said Tony Jarvis, director of corporate security in Asia-Pacific and Japan at cybersecurity start-up Darktrace.
“Offering to pay your employees with Bitcoin can be a way to attract what we might call ‘forward-thinking workers’, especially if you are in certain industries, like FinTech,” he added.
SharpRank is actually one of the companies offering to pay in cryptocurrency in an attempt to lure younger workers. It is an independent assessment agency that works with university students who trade as fire ambassadors.
Chris Adam, its founder and CEO, compared the appeal of a cryptocurrency among young people to “when Starbucks first became popular, it was important to be seen with a Starbucks cup.”
“It’s very similar in terms of being able to have some kind of cryptocurrency because that’s what all their friends are talking about.”
Although offering cryptocurrency as a salary has enabled companies to attract young talent, it comes with both rewards and risks for employees. CNBC Make It takes a look at both.
Forget waiting times, exchange fees and extra costs that come with traditional banking transactions – Receiving payment in cryptocurrency can be really fast, and it gives employees a degree of security, Jarvis said.
“When your employer makes a payment to you using [digital currency], as soon as your employer makes that payment, in the next second, it is in your account. You do not have to wait until the next day. “
Given the growing interest in cryptocurrency among younger investors, it is “no surprise” that they prefer to be paid that way, said Sumit Gupta, CEO and co-founder of CoinDCX, a cryptocurrency exchange platform.
“They would immediately have access to and hold crypto in their portfolios without having to convert from fiat, which incurs an additional transaction fee.” Fiat money refers to physical money backed by a government.
2. Avoid taxes – or not
When it comes to cryptocurrency tax law, the country you work with is issues. Some countries are “very lenient” in that regard, Jarvis said.
For example, Portugal is known as a crypto-tax haven for its 0% tax on bitcoin.
“When you consider how much these assets increase over time, the significant gains that can be made if you save on that tax side of the equation,” Jarvis added.
But more countries could tighten their reins over digital assets in the near future “in an effort to increase consumer confidence and security,” Gupta said.
Later this month, from April 18, individuals in the United States will report cryptocurrency transactions to the Internal Revenue Service.
Gupta added that similar measures have been implemented in India, where a 30% tax is imposed on cryptocurrency income.
“It is important for employees who are paid in crypto to be aware of how such changes affect owning and using cryptocurrencies … staying constantly informed of policy changes can allow users to respond quickly to developments,” he said.
3. Volatility: a double-edged sword
It is no secret that the crypto market is unstable.
Even bitcoin, one of the most popular cryptocurrencies, is not immune to wild price fluctuations – it has fallen sharply since November, and has fallen more than 40% from a record high of around $ 69,000.
However, the growth in the value of bitcoin over the past decade cannot be overlooked as its value started as “a few dollars,” Jarvis said.
“If you get your paychecks per week or month, it goes in as a certain dollar value today, and it automatically grows over time … there are some serious returns.”
As for SharpRanks Adam, navigating the ups and downs of digital currency can be a very positive experience.
“We see a number of children going through such a cycle… let’s say overnight, I wake up and [cryptocurrency] is devalued by 500%. The first thing I want to do is ask why, and then I will figure out ways I can make sure it does not happen again, “Adam added.
“I think it’s a useful skill in asset allocation and investment.”
Still, owning or getting paid in cryptocurrency may not be for the faint of heart.
“We found that the younger demographic, who may have a higher risk appetite, tends to see risk reward through a different lens than someone who really only knew how to get paid in cash,” Adam said.
4. Cyber security threats remain
Although cybersecurity threats are not unique to cryptocurrencies, industry experts told CNBC Make It that breaches will “persist as long as cryptocurrencies remain popular.”
“Many scammers and attackers target crypto-wallets – they use social engineering in exactly the same way we get phishing emails, “Jarvis said.
“And if you’re not a security expert, it can be really, really hard to know exactly how to secure those assets. You’re storing assets on a third-party platform, so there’s a risk there.”