Cryptocurrency in the Workplace: An Innovative and Cost-Effective Benefits Strategy

By Stephen Pair, co-founder and CEO of BitPay

The rise of cryptocurrencies has sparked a new trend in employee compensation. Businesses across the world are beginning to offer their workers the option to receive payment in Bitcoin, Ethereum and other digital currencies.

The idea of cryptocurrency as a part of a benefits package is straightforward: in addition to fiat currency, an organization pays its employees with a cryptocurrency like Bitcoin (BTC). This can be implemented multiple ways, either as a portion of regular pay, bonuses, one-off gifts or in place of a 401k matching plan. Employees can opt-in to allocate a portion of their weekly or monthly earnings to whatever digital asset they like, and it shows up instantly in their wallets.

Though the mainstream may view cryptocurrency as an investment, individuals and businesses alike continue to adopt it as an alternative form of payment, whether it's to buy consumer goods or pay employees. Internal BitPay data shows that crypto payouts have more than tripled over the past several months.

Integrating cryptocurrency into an organization’s benefits package brings a slew of benefits for organizations and employees alike.

From a branding perspective, payments in crypto shows that an organization is looking towards the future and modernizing. Cryptocurrency users are often young, digitally-savvy and high-income earners. Adding new and attractive benefits like crypto payroll can help entice star-prospects in a competitive field. In addition to the recruiting benefits, sending cryptocurrency payments is cost-effective, an especially big benefit to organizations with remote workers across the world. It can also be faster than ACH deposits. 

For employees, receiving crypto in their payroll offers more ways to diversify their investments. Getting paid in crypto allows employees to bypass transaction fees by receiving their pay in cryptocurrency vs. receiving dollars and buying cryptocurrency after payroll. The current crypto winter makes this a good time to acquire and hold through a dollar-cost averaging strategy. 

Organizations will typically have two methods of incorporating crypto into a benefits package: the “hands-on” approach and the “hands-off” approach.

  • Hands-on - In an on-hands approach, an organization will handle all aspects of their cryptocurrency benefits. This includes creating a wallet, buying and holding cryptocurrency, sending to employees’ wallets and maintaining compliance with any local cryptocurrency regulations.
  • Hands-off - Much simpler is the hands-off approach, in which an organization partners with a trusted payments processor company. In this scenario, no cryptocurrency knowledge is necessary. Organizations never have to touch or hold cryptocurrency. Instead, an account is funded in fiat which the payment processor partner then converts to cryptocurrency and distributes to employees. Similar to traditional payroll providers, crypto payment processors handle all logistics and compliance concerns. For these reasons, it is often the much more popular method of integrating cryptocurrency into an existing benefits package.

Once a company has decided to integrate cryptocurrency into its existing benefits package, there are a few considerations to keep in mind. Choosing a reliable, trusted payment processor partner is paramount if leveraging a “hands-on” approach. In the crypto world, the companies are much younger. It is important to consider a payment partner with proven expertise in the payments industry with solid references.

Organizations should consider which digital assets they’ll make available to employees. Currently the most widely used cryptocurrency for payouts is Bitcoin. However, Litecoin (LTC) and Dogecoin (DOGE) are two additional cryptocurrencies gaining prominence as preferred payroll options. Stablecoins like USD Coin (USDC) are becoming more popular and could make up a significant portion of crypto payroll in the future. Stablecoins let employees be a little more price conscious about when they buy cryptocurrency or other digital assets. So, employees can get their paycheck in stablecoin and then convert that into Bitcoin (BTC) if they wish. In addition, stablecoins are a lot simpler to spend, as they eliminate the complication of tracking capital gains for every purchase. 

Overall, integrating cryptocurrency into an organization's benefits package is an innovative and attractive way to compensate employees while embracing the digital future. The various benefits such as cost-effectiveness, ease of use and a modern appeal are worth the relatively low barrier to entry. Paying out in cryptocurrency can help attract top talent, particularly among young, tech-savvy, high-earning individuals. It’s also a faster method of running payroll across borders, making it a big advantage for companies with remote workers. The most seamless method of integration is choosing a proven payment processor partner that will not only handle crypto payments but also ensure organizations remain in compliance with the ever-evolving cryptocurrency regulations. 

In total, leveraging crypto as an employee benefit shouldn’t be viewed as an “all or nothing” move, but instead as another tool leaders have to entice, engage and reward teams.

Stephen Pair is the co-founder and CEO of BitPay, the world's leading provider of blockchain payment technology.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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