Will New Zealand’s crypto salary project work?

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Now in 2020, Bitcoin, and in a broader sense cryptocurrencies in general, have gone through hundreds of ups and downs. Most people remember the story of the “Bitcoin Pizza Guy” who paid 10,000 bitcoins in exchange for 2 pizzas. Back then, the price of bitcoin was so low, that hardly anyone could’ve imagined that those 10,000 bitcoins would at some point eventually be valued at $197,830,000 when bitcoin reached $19,783 back in 2017.

Since then, Bitcoin has risen in popularity massively, on a worldwide scale. Mass adoption of Bitcoin has been sped up due to endorsements from highly respected financial experts and global corporations. With the advance of technology, its use-cases and ease of adoption both increases on a rapid scale, and more and more people are able to easily get involved in the world of Bitcoin and cryptocurrencies.

Bitcoin has definitely come a long way, from people branding it as “gambling“, all the way up to governments declaring its official acceptance and approval. When you think about the actual value that cryptocurrencies provide as technology and stop thinking about them only as a valuable commodity, you’ll soon realize how different they have nothing to do with gambling.

With the rate all of this is going at, it’s only natural that financial regulatory bodies and governments would have increased interest and incentive to get involved in and regulate cryptocurrencies such as bitcoin. Though many of the original adopters and believers of crypto technology are apprehensive towards government’s interest due to their desire for cryptos to remain decentralized as originally intended, it’s doubtless, that governments’ involvement, at least on some level, will boost crypto’s ability to spread faster and on a wider scale.

New Zealand’s Crypto Salary Initiative

It was back in August 2019 when New Zealand financial and tax officials announced that it is now legal for companies to pay their employees in Bitcoin and other cryptocurrencies. The news was published by the Inland Revenue Department (IRD) in a bulletin from August 7, 2019.

As is the case with almost every subject of similar nature, it was met with a mixed bag of acceptance and skepticism, but the reaction was mostly positive and welcoming.

Online communities have accepted it with delight, stating it’s a major new step towards the global implementation of cryptocurrencies.

Thomas Hulme, a solicitor at London law firm Mackrell Turner Garrett stated, that this is another step towards governments recognizing and accepting what people actually want to be paid in, which is cryptocurrencies.

Cryptocurrencies are not a novel thing in New Zealand, and people are fairly familiar with them. There are a lot of fields and industries that have implemented the usage of Bitcoin. New Zealand casino deposit bonus is often given out in Bitcoin and seeing as casino gaming is very popular in New Zealand, a lot of people online are already familiar with it. It’s very common for people to trade goods and services between each other via Bitcoin, as well as send money overseas via Bitcoin instead of FIAT currencies.

What are the conditions?

It’s only natural that with the government’s involvement and official regulation, there’ll be some strict rules surrounding this implementation. The companies will only be allowed to pay out salaries in cryptos only under official employment agreements. The payments will need to be made in regular, fixed amounts, and all of them will need to be easily and readily convertible to at least one FIAT currency such as the New Zealand dollar. This would essentially ensure that companies that pay via cryptocurrencies will need to pay in coins that are easy and accessible exchangeable, and not some kind of altcoins that take ages to liquify.

Tax authorities have named specific cryptocurrencies to make an example of what they’re aiming for, stating that the main purpose of the crypto-assets is for them to function as an actual currency, and they believe such coins to be the ones like bitcoin, bitcoin gold, ether, bitcoin cash, and litecoin. According to them, easily-convertible stablecoins would be the best fit here.

Why should the Kiwis care?

Despite bitcoin’s continual success as we speak, with a controversial matter such as this, there’s bound to be different opinions and viewpoints on whether this is a net positive or negative for the people.

However, what needs to be understood is that this law doesn’t automatically mean that cryptocurrencies will be fully replacing FIAT money for salary. This is a very long process that’ll take many years, possibly a decade, to develop to a point where a conclusive assessment can be made.

With that being said, there are definitely some advantages and benefits to be had from all of this. Cryptocurrencies are steadily rising in popularity, and according to many finance and economy experts all over the globe, they won’t be slowing down. With New Zealand being the first country to officially allow Crypto salaries, they’re way ahead of the curve, and will likely be reaping more and more benefits as crypto becomes even more mainstream.

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