Over the past decade, crypto has established itself as indispensable in the worlds of finance, technology, and beyond. Despite initially being regarded as a niche product, the popularity of crypto has surged in recent years.
2023 is already breaking records with more than 420 million global crypto users. The number of people invested in crypto has only continued to trend upwards since 2018 when, in the course of two years, crypto’s global user base grew by 190%.
As the world has become exponentially more interconnected and digital, the understanding that the global economy is trending towards crypto has now become mainstream. While there are still many challenges and uncertainties associated with cryptocurrencies, their potential to disrupt traditional financial systems and offer new opportunities for innovation and growth cannot be ignored.
Global Companies Adopt Crypto Payment Systems
In recent years, crypto has been gaining acceptance as a legitimate form of payment by a rising number of global companies. This trend has been driven by several factors, including the growing popularity of crypto among consumers and the increasing ease of use and security of web3 payment systems.
Although the United States remains the leader with the highest number of crypto users, many emerging economies follow close on its heels. In response to the unstable conditions of emerging markets, crypto has seen a rise in popularity as a more secure option for financial transactions.
Beyond the case of Venezuela, at present, some of the most influential businesses based in the United States are now allowing for payments to be made in crypto. While AT&T accepts online bill payments in Bitcoin, Microsoft has enabled Bitcoin as an option for adding funds to accounts.
The shift towards accepting crypto payments is an imperative for staying competitive and meeting the changing needs of consumers in an increasingly digital world.
What is Crypto payroll?
Crypto payroll is a payment method where workers receive their wages or salaries in cryptocurrencies. Offering crypto payroll to employees and contractors is a competitive alternative to compensation in traditional fiat currencies. While it most typically involves payment in cryptocurrency, crypto payroll can also include stablecoins, NFTs, and other digital assets.
Why Pay Employees in Crypto?
Paying employees in crypto is essential for propelling growth in companies that want to stay competitive in an increasingly digital and interconnected global economy.
Remote teams made up of international workers have come to define the post-pandemic workforce. In their wake, it has become critical to find solutions to the lack of options for efficient, scalable and compliant global payroll.
Introducing crypto payroll, an alternative to compensation in fiat currency that ensures close-to instant international payments with minimal transaction fees.
Benefits of crypto payroll include:
- Financial freedom for employees and contractors.
- Immediate access to funds.
- Leverage for attracting and retaining talent.
- Global accessibility.
- Potential for appreciation.
Expanded Financial Opportunities
Crypto offers financial freedom that was not previously available through traditional banking systems. The decentralized nature of crypto allows for it to exist outside the control of any centralized authority and represents a meaningful break from the mold of traditional finance.
Decentralization is a key feature of crypto because it allows for users to interact with their finances directly and without intermediaries. Consequently, transaction costs are dramatically reduced while efficiency is increased.
This is especially notable when it comes to processing global payments. Deposits made into bank accounts across international borders can result in banks taking fees that amount to more than 66% of the money transferred. In comparison, when processing a payment in crypto using the Arbitrum network, transaction costs come out to an average of $0.307 per transfer.
Put simply, a transfer of $100 from a German to a Mexican bank account can leave the recipient with a mere $44, whereas that same transaction on the Arbitrum network allows the payee to collect $99.693.
With the mass adoption of crypto already underway, global businesses are beginning to realize the potential for new financial opportunities that were previously out of reach.
Expedited Access to Wages
An advantage of crypto payroll that makes it ideal for issuing both local and international payments is the immediacy with which transfers are received. Unlike wire transfers which can take days to arrive, crypto payments work on block time and can be close-to instant.
On the Arbitrum network, for example, a transaction such as the transfer of crypto between accounts can be initiated and delivered within minutes.
When it comes to paying global teams, this feature is critical and can be further leveraged by using a crypto payroll platform that enables mass, automated payouts.
Attracting Top Talent in a Competitive Market
Offering crypto payroll as an option for receiving wages carves out an avenue for companies to differentiate themselves from competitors and create a more attractive compensation package.
This has become especially relevant for hiring as more of the contemporary workforce demands the option to earn in crypto. At present, over one third of millennials and half of GenZs want to receive at least a portion of their wages in crypto.
By 2025, 75% of the labor force will be millennials, making their demands more amplified than ever before.
For future-facing companies, responding to these demands now gives an edge over the competition and offering crypto payroll is a key channel for appealing to this talent pool.
Efficient Global Payments
The global accessibility of crypto positions it as a valuable tool for companies contracting abroad. In many countries, due to unstable economic systems and lack of access to banks, receiving wages from international employers is near impossible.
By adding crypto payroll into the equation, organizations eliminate these roadblocks and open the door to working with a broader net of global talent.
How do you pay employees in crypto?
There are many options for paying employees in crypto. While legacy solutions that traditionally dealt solely in fiat currency are now providing crypto payments, there are also a number of next-gen solutions recently on the market, such as Rise. Choosing the right crypto payroll provider is essential to your business strategy.
How to Choose a Crypto Payroll Provider
In 2023, a new generation of crypto-focused payroll solutions has begun to emerge. With more available options than ever before, navigating the decision of which to choose is daunting.
By understanding the various features provided by crypto payroll solutions, a more informed decision can be made when selecting a provider.
Check Which Cryptocurrencies are Supported
First and foremost, when it comes to choosing a crypto payroll solution it is critical to ensure that the platform’s supported currencies match those held in your treasury. While many platforms only deal in crypto, this can become an issue if your contractors want the option to receive wages in fiat currency as well.
Additionally, you need to make certain that the payroll solution supports the token in which you hold your treasury. This is a high priority for DAOs who issue payroll in their native token. If the appointed payroll solution does not support this token, it will not be a good match.
An added advantage that certain platforms, such as Rise, provide is the routing between fiat and crypto. This added layer of flexibility allows for companies to fund their payroll in fiat currency while enabling contractors to choose crypto as their payout option, or vise-versa.
While some providers will have companies go through crypto exchanges, this can pose many complications to payroll. One of the main risks associated with crypto exchanges is the lack of security.
They are often targeted by hackers due to the significant amounts of money involved. If a hack is successful, users' funds can be stolen, leading to significant financial losses.
In the process of finding the crypto payroll solution that is the best fit for your organization, prioritize options that ensure include a compliance layer. While staying compliant paying global teams in fiat currency can be complicated enough, try adding crypto and its ever-changing regulation into the equation.
Compliance issues can all-too-quickly arise when issuing global crypto payments across countries that have widely varied and constantly evolving crypto laws.
Noncompliance is costly and poses significant risk to the health of an organization. Make sure to confirm that the crypto payroll platform you choose has a built-in compliance layer.
Start Paying Contractors in Crypto with Rise
Crypto payroll is more than just a compelling incentive for attracting global talent. In addition to the many benefits it provides, it is simple to onboard a crypto treasury and begin issuing automated payments.
Rise is a web3-enabled team payment solution that gives you the flexibility to pay your global contractors in the currency of your choice.
In addition to offering expanded options for your treasury, Rise allows contractors to have full control over how they want to get paid. Through flexible routing options, you can finance your payroll using fiat currency while enabling your employees to opt for crypto payments, or the other way around.
In addition to the unique flexibility that Rise provides, it also ensures an elevated level of security and compliance. All payments made through Rise, regardless of the country or the currency, are fully compliant.