The Bitcoin payroll provider Bitwage has started offering employees a way to receive wages paid in cryptocurrency, but without volatility. Following the recent announcement, the company's customers are able to sign up for the Bitwage platform to pay their employees using the USD Coin (USDC) stablecoin, which is linked to the US dollar price.
Employees or freelancers can also sign up to receive wages in the stablecoin. The startup update comes at a time when global markets are in turmoil due to uncertainty about the recovery from the effects of the coronavirus and many national currencies have lost value against the dollar.
The first stablecoin for the startup
USDC is a stablecoin launched in October 2018 by the CENTER consortium, which includes a partnership between the P2P payment company fintech Circle and the U.S.-based company Coinbase.
The group was formed to develop cryptographic assets and price-stable network protocols. The stablecoin is issued as an ERC-20 standard token on the Ethereum blockchain and is supported by the corresponding USD held in the accounts, subject to regular public reporting.
The ability to pay employees in cryptocurrency is not new as Bitwage has already been engaged in wages related to cryptocurrencies since at least 2014. In addition to bitcoin (BTC) and bitcoin cash (BCH), it has started offering ether payments (quotation ETH) last June. Employees and freelancers can choose a percentage of their payments to be made in cryptocurrency or fiat.
Wages in stablecoin are a rapidly growing trend, especially in South America
The use of stablecoin for payments is a relatively recent but rapidly growing trend. This bypasses the volatility of cryptocurrencies such as bitcoin and ether, which means that workers will not risk losing a percentage of their wages when funds arrive and when they change to another fiat currency.
Bitwage-guaranteed tokens are becoming, according to Bitwage, more popular in South America, where inflation has strongly influenced the value of the government-backed fiat currency in some countries.
The Venezuelan bolivar, for example, has depreciated significantly since June last year and has fallen by more than 3000% against the dollar, opening up potential for USD-backed stablecoins to provide greater stability to communities.
“During our tests, we saw a lot of interest in Latin American communities regarding stablecoin wages. We are excited to see how this will improve the lives of communities with troubled financial systems around the world, "said Jonathan Chester, Bitwage CEO.
Bitwage is headquartered in San Francisco and manages salaries in the United States, Europe, Latin America and Asia. Bitwage recently launched a 401k bitcoin sponsored by the company with Leading Retirement Solutions, Gemini and Kingdom Trust.
