Crypto salaries enter the workforce
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Payment in cryptocurrency is becoming increasingly common, but even with the existence of stablecoins, it is not without its risks. Hannah Duncan reports.
Receiving his salary in ethereum has almost become normal for 41-year-old illustrator, Nick Ashton. “I was quite dubious,” he admits. “But it’s been eye opening.” According to research from payroll provider Deel, Mr Ashton is not alone. Five percent of the platform’s salaries globally (more than 100,000 contracts) are now paid in cryptocurrencies – with Latin America and Europe, the Middle East and Africa leading the way. Tellingly, these virtual pay-outs have increased 10% every month since late 2020, compounding in popularity.
Crypto salaries are becoming part of a sprawling global movement, spurred on by remote working, Web3 and the spiralling cost of living.
Stablecoins add reassurance
Abolishing government or central bank interference was a founding principle of decentralised finance. But it can come at a heavy price, as volatility can be stomach-churning. “It’s a real worry,” says Mr Ashton. To alleviate this, one breed of cryptocurrency – stablecoins – has soared in popularity. Somewhat ironically, stablecoins are pegged to fiat currency. But this is precisely what makes them so useful for salaries.
[using] stablecoin in one form or another would be the only real way to get mass adoption
“Stablecoin is more reliable,” comments Pete Townsend, managing director of accelerator Techstars and co-host of the Money Never Sleeps podcast. He believes stablecoins are one of the major drivers behind the steady surge in crypto salaries.
Alan McDonald, co-founder of data union platform Unbanx, agrees. “[Using] stablecoin in one form or another would be the only real way to get mass adoption,” he elaborates. “They’re so popular for payments because it’s almost like one digital dollar.” Deel’s research corroborates this – though bitcoin still dominates, accounting for 42% of crypto-paid salaries, stablecoins are catching up fast at 29%.
But stablecoins are not a haven. TerraUSD nose-dived in May 2022, leaving investors with $45bn losses, while its creator Do Kwon is currently suspected to be on the run. Although stablecoins like Terra will be collateralised, there is little doubt that accepting a paycheque in this form involves some risk. “Personally, I would rather just get paid in pounds,” Mr Ashton confesses. “It’s stressful.”
New types of salaries emerge
Instead of an “all-or-nothing” approach, a happy medium is edging into the mainstream. Fifty-four percent of bitcoin holders would prefer to receive some – not all – of their salary in crypto. And 36% of under-40s in the workforce today would be interested in taking partial payments.
Freelancers are especially keen to accept coins for jobs abroad, the top three roles being web developer, consultant and content writer. Amélie Arras, marketing director at crypto wallet Zumo, falls into this category. For extra consultancy work, she is paid in crypto. For her, it opens entirely new markets and job opportunities.
“Because the crypto and Web3 world is all about being decentralised, they have decentralised workforces too,” says Ms Arras. “Imagine the complexity of paying people in different currencies. Usually what tends to happen is that companies pay in tokens [like] stablecoins.”
“Start-ups receive investment from crypto-venture firms,” adds Mr Townsend. “A lot of these businesses don’t have bank accounts; they have crypto ones. And they pay employees in crypto.”
The rise of micro-incomes
As fintechs democratise data and ordinary people look for creative ways to make ends meet, another source of crypto salary is emerging. Mr McDonald’s platform, Unbanx, allows users to sell their banking data for tokens. Each month they will receive around £5 in crypto.
According to Mr McDonald, customers can sell more data – such as browsing histories, vehicle data or health data – elsewhere to collect a pot of crypto. This is known as “income stacking”, and it generates around “£30 or £40 each month” in passive income. Mr McDonald expects the tokens will most likely be redeemed as gift cards for Amazon, Netflix or similar services, and appeal to young people like students.
“Ideally, you could end up with a kind of universal basic income,” he explains. “It’s not going to replace your job. But if you have enough of these streams coming in, it can ease the cost of living.”
Merchants jump on the trend
Crypto salaries – in various forms – are trickling into the mainstream. Over the coming years, Mr Townsend believes they will be further advanced by the emerging middle class in west Africa, alongside US institutional investment. “We’re going to see a lot more institutional-side adoption,” he adds.
Crypto salaries are likely to have a domino effect on merchants, too. Ms Arras developed her love of crypto after entering the 2017 Fintech Finance Payments Race, where she was challenged to travel the world with bitcoin. Since this time, she has noticed waves of new merchants accepting the cryptocurrency.
“The more people are paid in crypto, the more they want to spend the crypto and the more [merchants] will accept crypto,” she highlights. Research from Deloitte corroborates this view, which reveals that 75% of merchants are now planning to accept crypto coins within two years.
