New Zealand has taken a bold decision to make it legally possible for companies to make payment of salaries in cryptocurrency. This makes them the first country to execute this action although a number of companies have accessed the possibility of taking this initiative.
This decision has been said to be a bold one as many countries and lawmakers are busily contemplating the legality of cryptocurrency as the standard of deferred payment. Others are also linking the emanation of these decentralized currencies to the recent money laundering problems.
According to a report, the initiative comes with a number of conditions of which companies and employees need to satisfy before they qualify to pay and receive payment of salaries in cryptocurrency.
According to the statement, workers who work under official employment agreements are subjected to this ruling. Also, the payment of salaries amount has to be fixed to be issued in cryptocurrency. This implies that the underlying digital asset of which salaries would be made must be pegged to one or more fiat currencies.
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As claimed by the ruling, only cryptocurrencies that are easily convertible to fiat are allowed. This means companies are strictly prohibited from issuing payment of salaries in altcoins that have low liquidity and difficult to be converted to fiat on major exchanges.
It was stated emphatically that only salary workers are eligible to receive payment in the digital currencies, not a self-employed idiot of benefits that far outweighs its bad sides.
Employers would be saved from some of the expensive charges of the traditional banks and the time to spend at the said financial institutions just to withdraw funds. Being paid in Bitcoin provides an efficient and convenient way of withdrawing funds from anywhere at a cheaper fee. Companies that have workers in remote areas can also issue payment of salaries without any stress and hassle.
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This initiative to legalize salary payment in the decentralized currencies comes from the earlier decision made on August 7, 2019. It was decided that bonuses may be paid in cryptocurrencies. Also, the salary option according to the report, would fall under the income tax scheme.
The legalization of payment of salaries in cryptocurrency has shown how well digital assets led by Bitcoin is being accepted by institutions, and what the future holds. However, a concern has been raised concerning how the volatility nature of cryptocurrency would be dealt with, though the law has made it clear that all salaries paid must be in a fixed amount.
Cryptocurrency has found its way into the various institutions as a medium of exchange through its status as money is still under consideration. It was reported that some schools in the U.S.A now accepts tuition in Bitcoin.
The constant increase of the adoption rate of the decentralized assets makes it possible for the market price of the leading digital assets such as Bitcoin to stage a bull-run which can send it above a trading price of $100,000 in the near future as predicted by experts.
Source: Market Insider
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