Just a couple of years ago, “crypto” was commonly used in scientific circles as short for cryptography. Today, it undeniably means a digital medium of exchange used for financial transactions. It promises a world of decentralized banking matters with countless benefits while gaining immense popularity and recognition, but also significant backlash. Talking about it is inevitable, accepting it is controversial. Is it a sign of innovative thinking and progress, or is it a trend that slowly disappears into false hopes? Read on to find what’s to know about it, from a business and recruitment perspective!

Not long ago, businesses were procrastinating the acknowledgment of crypto’s existence, not even mentioning its integration into their policies and processes. The picture was foggy, it lacked the appropriate amount of supporting studies for it to be a worthwhile investment, and there were countless questions regarding its legitimacy as well. Now, companies like Twitter, Amazon and Tesla advocate for it, and small businesses, per usual, are bound to follow. But do the benefits really outweigh the risks? And should companies pay their employees in crypto?

1. Cryptocurrencies are resistant to inflation and easier cross-border payments

Fiat currency (that is not backed by commodities like gold, usually declared by a government to be valuable) has to go through conversions and intermediaries if transactioned or exchanged. It can slow down payment processes by a lot, and are dependent on factors that make it an unstable and time-sensitive action. Since cryptocurrencies run on blockchain technology, they are independent from such measures, and can reduce costs associated with these transactions. To illustrate it, employers are able to send employees their compensations in one transaction, they receive the same currency that was sent out, and are able to convert or sell it themselves, internationally.

The transparent nature of blockchains also provides crypto payments a sense of security. Anyone can see blockchain transactions, but no one is able to interfere. This helps independent contractors and freelancers the most, as it builds trust towards the whole system.

2. But they are risky for other reasons

Since these currencies are not dependent on national inflations and legislation, they depend on countless other influencing factors that modify their value, possibly by higher rates.

In the United States, the IRS requires people to pay tax on the digital coins — and that can get quite complicated. Employees must report their own total wages in dollars, based on the value of the cryptocurrency. Now, as it’s value is, just like stocks, different by the day, that means they have to pay the same amount in taxes regardless of the coins going up or down in  value. The value of incomes can vary the same way, and leaders can easily feel that they over-, or undercompensated their workers, not even mentioning a significant drop, that could make business owners unable to pay their people, if they had larger funds in crypto.

3. Paying employees with cryptocurrency signals openness to innovation

Companies in some competitive fields like the tech industry could enable crypto payments to attract top talent, or younger workforce to their teams. Both drawn by innovation and modern day technology, firms that find ways to incorporate crypto into their financial processes are able to charm like-minded talent easily.

It also pictures an employer brave and knowledgeable enough to handle such matters, which can seem quite attractive in the eyes of candidates, paired with the choice they get in how they wish to be compensated. Any opportunity to act on one’s own will is attractive in all markets at the moment, especially in industries where innovation is part of the everyday routine.

While these transactions are becoming more and more widespread, they are certainly not for everyone just yet. In industries where employees are not closely working with the knowledge that would enable them to understand the world of web 3.0 and crypto, it’s quite unnecessary and challenging to switch. There’s a short checklist to ensure your business might be ready for the integration:

• -Enough capital to be able to operate if the value drops
• -Deep knowledge about the local legislation
• -A professional to advise you on the matter within the company, as things change daily
• -Accepting workforce and clients
• -Appropriate tools to handle the currencies

Even if you do everything right, as of today, crypto remains a risk. But it is quite likely that the practice will slowly gain legitimacy over time, as blockchain technology can help monetize and control how the information is circulated. Cryptocurrency has great potential to improve the system of transactions and transfer of money, which enables it to gain further popularity and demand. We are interested in seeing your takes, and what the future holds!