Bitwage Allows Companies to Pay Employee Salaries and Taxes in Crypto
Several crypto firms already pay some of their employees in crypto, including Ripple that reportedly offered millions in XRP as bonuses to top engineers at the firm. Now, a crypto-focused firm has launched a service that targets mainstream companies.
Bitwage, which already allows contractors on freelance platforms to pay workers in cryptocurrency, has partnered with a U.S.-based payroll company in a move that allows ordinary firms to begin paying their staff in digital currencies. The partnership involves Simply Efficient HR, a Texas-based PEO (professional employer organization) and will see employers in the United States use bitcoin or ethereum when funding payrolls, taxes, or paying other benefits.
The CEO of Bitwage Jonathan Chester has said that the new service provides an additional way through which companies can pay their employees, including with crypto.
With around 20,000 users registered on the platform, and about 45 clients representing active companies, Bitwage hopes the new service will expand even further to cover more people and firms in the U.S. Companies on the platform can now pay all employees under them in crypto, taking it further than the current system where companies pay contractors and (they) in turn pay workers sub-contracted to them.
In terms of taxation, deducted amounts of cryptocurrency meant for taxes are converted into U.S. dollars before being submitted to the relevant authorities. All these processes are conducted in accordance with the existing laws and taxation systems within the United States.
To test the product, Bitwage worked with P2P crypto exchange and trading platform Paxful, which reportedly used the service while in beta beginning November 2018.
And Paxful controller Hayel Abbassi noted that the Bitwage product is bridging that payment gap that has cropped up between cryptocurrency and the legacy financial systems. According to him, the payroll product allows Paxful to send payments in bitcoin to its employees’ address, with the workers receiving “net checks” that indicate all the required taxes—both for the federal and state governments.
At the moment, Bitwage says its product is used by half of its current pool of customers, those that hold or offer crypto-related services. The other half is said to leverage the service to facilitate cross-border payments using crypto assets that then get converted into respective fiat currencies.
The company believes that rolling out this new service will greatly benefit a majority of firms that hold huge reserves of bitcoin and wish to use that for payments. Especially attracted to this service should be crypto-related companies that have found it was hard to establish banking relationships or are having issues with their fiat-based banking provider. For them, it becomes much easier to just pay for all services or goods using cryptocurrencies.
Bitwage currently handles up to $3 million in crypto payments per month and could see even more revenue given the rapid growth crypto is witnessing in terms of being used as a payment option.
In all likelihood, it wouldn’t be surprising for it to reach record figures like those posted by bitcoin payments processor BitPay. The Atlanta-based firm which reportedly processed more than $1 billion in crypto payments in 2018 alone.