Digital money is becoming increasingly popular with today’s young workforce. Indian Tech companies are meeting this growing desire by paying salaries, bonuses, or other incentives partly in cryptocurrency. It is a quick and straightforward transaction for employers, whereas, for employees, the perk and excitement lies in the possibility of the cryptocurrency appreciating in value.
Employers can take either one of two approaches. The first is to register their entities in crypto-friendly nations and pay their workers in cryptocurrency to avoid legal or tax-related hurdles. The second approach involves recording the payment as a rupee transaction in their books but facilitating the conversion of the rupee into cryptocurrency.
A gateway Indian Tech company executive, whose firm facilitates cryptocurrency payments via banking channels, said, “Generally, we use a stable coin or cryptocurrency like Tether (USDt) to pay salaries. The employees can cash them out immediately or hold on to them.” With Tether being pegged to the dollar, a systems engineer earning $60,000 per annum will get 60,000 USD.
Cryptocurrency is yet to gain momentum in India. This could be due to concerns amongst both employers and employees regarding tax implications. However, several Indian tech companies are making use of digital money. Sujeet Kumar, a consultant from Patna for use cases of blockchain and cryptocurrency, said, “After encashing altcoins via cryptocurrency exchanges, I file that amount as income from consultant fee for tax returns.”
Kumar is paid in altcoins such as Plaas Token, Ethereum, and Audio coin. He then encashes it through Indian cryptocurrency exchanges. “I usually convert the coins according to my need. Most of my clients are in the cryptocurrency market, which makes transactions easier and faster. I have taken my last year’s bonus via cryptocurrency too.”
A cryptocurrency news website CEO was quoted saying that their company “follows a method where we pay salaries in cryptocurrency and draw a salary slip in rupees. This spares Indian Tech company employees from any concerns if their salary slips are in crypto.”
Opinder Preet Singh, head of Chain Assets Capital crypto hedge fund, said, “With too many legal regulations and lack of clarification on recognizing cryptocurrency in India, we have registered our company in a crypto-friendly jurisdiction abroad. This allows us to pay salary, bonuses, and incentives or spend money in India and also around the globe, especially for freelancers hired overseas.”