Mainstream media plays an important role in educating public about the world of cryptocurrencies, and this time, two major British news outlets attempted to discuss what it means to be paid in crypto. The picture they showed is somewhat mixed.
First, the Financial Times opined that, while an increasing number of people working in crypto industry chooses to be paid in tokens, having one’s salary payed in crypto wouldn’t actually be progress.
The author explains that, while people can choose how they wish to be paid in many western countries, tax authority is interested in “how the more exotic types of payments are taxed,” with authorities of certain countries, such as the UK and New Zealand, concluding that the payments are treated as conventional monetary income if they are regular, they can be sold by employees, and the assets are freely exchangeable or pegged to conventional currencies.
“If one believes — as many cryptocurrency fans do,” the author says, “that one of the main advantages is liberation from the tax authority’s ability to take value from individuals, this formalisation of the tax treatment of salaries paid in cryptocurrency is hardly cause for celebration”, adding that “it is becoming clear that the idealistic view that cryptocurrency salaries are a step forwards in terms of monetary liberation rather than backwards is sadly mistaken.”
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The FT argues that there is an “idealists neglect” of the periods in history when employers would pay their workers in company scrip (a substitute or alternative to legal tender) or other token to keep them practically “enslaved.” The example given here is of the great great great great-grandfather of the actress Kate Winslet, who was a stable groom at a large Swedish estate and “was paid entirely in tokens that could only be redeemed for goods on the estate, making him a de facto bonded slave of the landlord.”
The FT finds that crypto is theoretically exchangeable and taxable, but that “its market value and acceptability is hardly predictable”, concluding that “it’s hard, on that basis, for the liberty-minded to square a move back to tokenised payments with progress.”
Meanwhile, The Daily Mirror not only quoted the Bank of England governor, Mark Carney (“Cryptocurrencies act as money, at best, only for some people and to a limited extent, and even then only in parallel with the traditional currencies of the users”) but found a real life example also.
They talked to Zakk Lakin (24), the software developer living on the Isle of Man, who decided to have his salary paid in BTC, after cryptocurrency firm CoinCorner allowed their staff to choose if they wanted to be paid in GBP or BTC.
Lakin is quoted as saying that his lifestyle hasn’t changed much, and that purchases are easier than what people think, given a number of online merchants who accept BTC.
“As a young techie in the Bitcoin industry, I feel it’s important […] to actually use Bitcoin for its original intention as electronic cash,” he said.
However, the developer still has to convert all of his “permanent outgoings (such as rent, direct debits etc) to GBP on payday to avoid any issues around the Bitcoin price movements” while the rest is left for disposable income/savings. In either case, he has the advantage that – working for an exchange- he doesn’t have to pay a fee to swap his Bitcoin into GBP.
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