In all corners of crypto news, investors are watching for the next big thing. That said, many realise that crypto remains a viable play even if you aren’t buying the major names like Bitcoin or Ethereum. Because of this, an interesting trend has been seen in Australia.
With increasing regularity, employees at Australian companies are opting to take their salaries in the form of stablecoins. Why would someone want to forego a salary of traditional legal tender for something seen as speculative? As it turns out, there are quite a few reasons.
Why Are Australians Taking Their Salary in the Form of Crypto?
Each investor has their personal reasons for wanting salary in the form of crypto rather than fiat currency. These are the biggest reasons that more and more Aussies are taking their salaries in the form of stablecoins, with an estimated one in four Australians being willing to be paid in Bitcoin.
Investment Potential
Without a doubt, the single biggest reason that Aussies are willing to take stablecoins as a form of payment is because of the potential it has as an investment. One need look no further than the aforementioned Bitcoin to see how that kind of potential plays out.
Other stablecoins like Litecoin, Ethereum, etc. may not have that kind of high-end value but can create a successful portfolio in their own right. Most investors believe that crypto will continue to appreciate with time, making them attractive long-term investments, especially compared to fiat currency.
Aligning with Crypto
Both the crypto and blockchain sectors are growing rapidly, hiring new people all the time. It is not uncommon when working for entities within those spaces to be compensated at least partially with cryptocurrency.
In the end, this works for a few reasons. For one, it allows for investment in a growing sector, but it also aligns with the very nature of the work being done. By accepting at least partial payment via cryptocurrency, workers are able to be very much involved in the ecosystem in a positive way.
Inflation Hedge
The global economy has not been this uncertain in years. With so many questions abound, investors are looking for a hedge, a “safe play” in the face of current concerns. One of the major upsides when it comes to crypto is that it is seen as a safe play against inflation.
Some individuals see crypto as a means to keep their purchasing power while also protecting against the devaluation of native fiat currency. The belief is that, no matter what is happening with the economy, crypto will retain its value and thrive.
Decentralization and Financial Autonomy
At the very heart of cryptocurrency is decentralization. The very nature of crypto is that there is no need to rely on a central entity. Many believe that the future will see investors totally in control over their wealth even in the most uncertain economic conditions.
Given that decentralized assets aren’t tied to central banks, investors are not at the whims of these massive organizations. Banks have failed in the past, but taking a decentralized approach can provide a layer of insulation for those with enough crypto holdings.
Convenient Payment Methods
Another major selling point when it comes to cryptocurrency is its ability to be used in lightning-fast transactions. Crypto transactions are generally processed within seconds, typically at lower costs than would be found when using more traditional banking systems.
For international businesses or employees, particularly those with offshore teams, crypto can be an attractive payment method. As more inter-chain options come to the forefront, holders of crypto will only have more choices for making fast, secure, low-cost payments.
Pre-Tax Potential
Investors are always seeking an edge. One of the more common methods for doing so is finding investments that have pre-tax potential. More and more Australians are receiving bitcoin and other stablecoins as compensation because they can invest in the asset before it is taxed. This provides an additional layer of investment potential than fiat currency offers.
How is Crypto Taxed in Australia?
The taxation of crypto in Australia is very much a topic of conversation these days. With so many Aussies owning cryptocurrency in one way or another, knowing the Australian Treasury Department’s stance on taxation is critical.
Currently, the Australian government classifies crypto assets as property. Because of that, any profits or losses made on them are classified as capital gains or losses. Any disposal, trade, or exchange of crypto that results in a gain or loss should be reported specifically for tax purposes.
The Australian government offers a few helpful tools, like a calculator and record keeping tool, to help investors be responsible and report their taxes accurately.
Capital Gains
Per the Australian government, capital gains taxes come from trigger events like selling crypto, trading crypto, gifting crypto, or using crypto to pay for goods or services. Though profits from crypto transactions are called capital gains, they aren’t necessarily considered to be part of an individual’s income tax. As a result, they are not taxed separately.
The total capital gains earned each year is combined with other incomes, added up to calculate the total tax liability:
· 0-$18,200: 0%
· $18,201-$45,000: 19c for each $1 over $18,200
· $45,001-$120,000: $5,092 plus 32.5c for every $1 over $45,000
· $120,001-$180,000: $29,467 plus 37c for every $1 over $120,000
· $180,001 and over: $51,667 plus 45c for every $1 over $180,000
Close record keeping, particularly when it comes to crypto transactions, is required by the Australian government. This includes receipts for crypto that is transferred, bought, sold, or traded, including the time and date of each transaction.
It is critical to report all crypto transactions. Australia utilizes a crypto asset data-matching program that cross checks transactions reported on a tax return with any transactions executed via service providers.
Is Getting Paid in Crypto a Safe Move?
Even a couple of years ago, receiving compensation in the form of crypto would have been seen as a fairly risky move. Now, it may be the smart play depending on what compensation is and what stablecoins are in play.
Investors feel confident that the market will take a bullish upturn as 2025 winds down and the calendar flips to 2026. Being compensated in Bitcoin or another major stablecoin could pay major dividends in no time.
At the end of the day, crypto is a speculative investment. Though some stablecoins are more secure and less likely to experience a big drop, it is a risk that comes with investing. Being compensated in crypto means potentially getting less than market value for your services depending on the state of that coin’s market.
The next 1-5 years will be interesting for crypto investors. With values expected to rise sharply, there may be no better time than now to take some or all of your compensation in crypto. Could we be seeing the next rapidly-rising trend in the digital assets market?
