Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert
Zero fees, no slippage
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Is Accepting Crypto Salaries Worth It? Experts Unpack 4 Drawbacks to Know

Is Accepting Crypto Salaries Worth It? Experts Unpack 4 Drawbacks to Know

Cryptonews2024/06/14 08:04
By:Shalini Nagarajan
Is Accepting Crypto Salaries Worth It? Experts Unpack 4 Drawbacks to Know image 0

Fueled by a desire for greater flexibility, the exploding popularity of freelancing is ushering in the era of the “crypto worker,” where traditional salaries are swapped for crypto payments.

Crypto payments have gained significant traction recently as a way for freelancers to be paid on their terms.

A recent survey revealed 93% of freelancers around the world want to be paid in crypto or stablecoins . This surge in interest stems from the frustration many face with foreign exchange hassles. Transaction fees and exchange conversions make working with international clients a challenge. Crypto offers a potential solution, streamlining payments and eliminating these roadblocks.

Cryptonews tapped into expert insights to explore the potential pitfalls of crypto salaries.

KYC and AML Rules Pose Challenges


While crypto salaries might seem trendy, Felix Shipkevich, founder of New York-based law firm Shipkevich PLLC, warns they can be trickier than traditional methods.

The main culprit? Crypto’s notorious volatility. Unlike a steady paycheck, Bitcoin and similar currencies can swing wildly in value. This means freelancers could see their hard-earned income shrink before they convert it to usable cash.

And even though Bitcoin’s price has been on a tear, skeptics warn its future remains a gamble. Shipkevich indicated that stablecoins instead offer more stability. But their value is still tied to potentially risky reserve assets.

He also said that freelancers need to navigate a technical learning curve. They would have to understand digital wallets, blockchain, and the intricacies of crypto transactions. To top it all off, ever-changing crypto regulations throw tax compliance into a spin. These headaches can vary by location and may require specialized accounting help.

Further, KYC (know-your-customer) and AML (anti-money laundering) regulations are tightening. This requires freelancers to jump through hoops with identity verification and transaction limits. In short, crypto salaries come with a hefty dose of complexity.

Tax Bill Might Burst Your Bubble


Daniel Krupka, chief research officer at Coin Bureau, said that unlike the simplicity of fiat taxes, crypto throws a wrench into the equation.

“Whereas it’s easy to calculate how much you owe in taxes with fiat payments, it’s less easy with crypto payments, particularly volatile cryptos like BTC,” he said.

Is it a capital gain, regular income, or something else entirely if you hold onto that Bitcoin and its value skyrockets? Krupka emphasizes that the tax headaches, especially with volatile cryptos, might outweigh the initial appeal of crypto payments for freelancers.

Hurdles in Crypto to Cash Conversions


Daniel Fayemi, a backend engineer at Bitvavo, said that converting crypto to cash ( off-ramping ) can be challenging depending on your location. For instance, in the Netherlands, strict regulations limit the amount of money you can move off an exchange without providing personal details.

Stablecoins Outshine Crypto for Payments


Matthew Leising, co-founder at DeCential Media, said that stablecoins offer an excellent choice for freelancers familiar with crypto and are relatively straightforward for newcomers to establish.

Stablecoins also provide an opportunity to earn a respectable yield within the crypto economy, such as the current 5.1% on USDC at Coinbase. However, a potential challenge arises with the freelancer’s bank, which may be hesitant about facilitating crypto transactions, especially when converting earnings into US dollars or other fiat currencies, Leising said.

According to Rebecca Liao, CEO of Saga, the good news is that legislators and presidential candidates are increasingly embracing crypto . She believes that once comprehensive crypto legislation is enacted in the US, freelancers will extensively receive payment in stablecoins.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!