Cryptocurrencies have become a mainstay product as more industries develop blockchain and crypto applications.
The number of crypto-friendly countries has also grown, and more individuals around the world have taken up crypto trading as part of their investment portfolios.
For crypto related businesses, paying salaries in cryptocurrency has become the standard. Employees in these companies receive their dues in cryptocurrency, and they reap the many benefits that come with these digital assets.
Receiving crypto salaries will encourage more people to take up online cryptocurrency trading, which is vital to the movement of cryptocurrency into mainstream use.
Switzerland is one of the most crypto-friendly countries, and most of the crypto related companies in the country are paying wages in crypto.
Due to its crypto-friendly regulations, Switzerland has become home to several crypto businesses’ headquarters, with most of these firms found in the Swiss Crypto Valley in Zug.
The Libra Association, Bitmain, Shapeshift, Ethereum Foundation, and Xapo are some of the companies that can be found in the Swiss Crypto Valley.
While Switzerland has always been famous for its financial privacy laws, this reputation has been eroded as pressure from the European Union and the USA has piled on the country.
The role the state has taken as a crypto-friendly jurisdiction may bring back the high level of financial privacy that is associated with Switzerland.
Individuals that are paid in cryptocurrency are required to declare their earnings to the tax body in Switzerland and pay the tax applied to the crypto holdings, just as is the case when one earns in fiat currency.
Gains that are acquired through investments and trades in cryptocurrency are considered tax-exempt gains, but one may have to pay wealth tax depending on the amount of cryptocurrency they own.
Development of crypto-friendly jurisdictions
The regulations which exist in Switzerland make it easier for crypto related businesses to operate in the country. While the country has been a leader in this regard, other countries are also working on creating a favorable environment for blockchain and cryptocurrency projects.
In Estonia, the USA and Japan, some crypto firms are paying their workers in cryptocurrency. GMO, a Japanese internet giant, said that their employees would receive part of the salaries in cryptocurrency.
Kraken, an American based crypto exchange, announced that they paid 250 of their employees in Bitcoin starting in April. This is a reflection of the growing popularity of crypto salaries and companies outside of the crypto sector need to realize that they can also pay their employees in cryptocurrency.
Classification of crypto as commodities and their role in salary payments
In countries such as New Zealand, there are no specific regulations that allow salary payments in cryptocurrency, but companies are paying their employees using crypto assets all the same.
This is because the country’s laws allow salaries to be paid using non-monetary assets such as commodities and cryptocurrency is considered a commodity in the country.
New Zealand’s tax authority came out and explained that it is legal to pay salaries in Bitcoin due to its status as a commodity. Companies are expected to apply tax practices to these cryptocurrencies as they would on salary payments made using fiat currency.