Payroll in USDC: The tax mess no one wants to talk about | Opinion

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On paper, stablecoin salaries are a no-brainer. So why haven’t they been adopted worldwide as the standard for payroll yet?

Summary

• Stablecoins promise speed and savings — payments can settle in seconds at a lower cost compared to fiat transfers that take days and carry high fees.
• Adoption faces trust and tax hurdles — public fears over collapses like Terra, wallet hacks, and unclear tax rules make employees and accountants hesitant.
• Accountants hold the keys — in many firms, payroll adoption will depend on whether accountants feel confident with regulatory and tax guidance.
• Regulation could unlock growth — laws like the U.S. GENIUS Act and clearer global frameworks may normalize stablecoin salaries, potentially reshaping payroll as the market heads toward a projected $2 trillion.

The difference is striking. Stablecoin payments can settle in seconds and avoid hefty fees. Compare that with typical international fiat payments for global workers, which can drag on for up to five business days and cost far more in fees. 

So what’s holding stablecoins as a salary payment method back? Let’s be honest, there’s more than one hurdle. For many, the idea of routing a paycheck through a crypto wallet still feels super risky.

Crypto industry interest is growing fast

The crypto industry, naturally, doesn’t seem to be so scared of the concept. In 2024, the share of crypto industry workers receiving pay in digital assets nearly tripled, reaching 9.6% according to a global Blockchain Compensation Survey conducted by Pantera Capital.

For crypto outsiders, however, headline-grabbing failures are stealing the show. Take the Terra-Luna fiasco as an example, when the UST stablecoin lost its peg to the U.S. dollar in May 2022, serving as a reminder that such assurances are not foolproof. For many outside of crypto, the Terra collapse may have been the first time they even heard of stablecoins, and not in a good way.

Combine that with constant headlines about hacked crypto wallets and scams, and it’s easy to see why the average employee with a family and mortgage would hesitate to experiment with their salary, never mind having to convince HR bosses.

Tax confusion is an obvious obstacle

Setting aside the more obvious hurdles, the adoption of stablecoin payroll may hinge on winning over accountants in areas where such payments are already permitted. Sounds weird, but for many small and mid-sized firms, accountants act as the key voice on payroll decisions; if they advise against something, firms usually listen. 

And everyone knows there’s still a lot of confusion around how taxes work when paying employees with stablecoins. That means broader adoption of stablecoin payments for remote contractors may only come once accountants feel confident and comfortable recommending them as a payroll option.

Several major jurisdictions have already issued guidance on using cryptoassets as a form of payment, while in other regions the rules are far less clear.

Employers must be well aware of the laws to avoid problems

The GENIUS Act, signed into law by U.S. President Donald Trump in July, was a significant step forward for the United States. For the crypto-savvy, it’s relatively straightforward, but the way taxes apply in some regions at both the income and capital gains level still feels like “double-dipping” to many.

The exact intricacies vary slightly from region to region; however, some jurisdictions have made their guidance on taxing stablecoin salaries more accessible online than others. For most traditional accountants, it isn’t even a concept they’ve had to wrap their heads around, which only works against their clients who want to adopt the new technology.

Employees expect their pay to be exact, on time, and compliant with local law. If a misstep leads to unpaid taxes or penalties, the reputational damage to an employer can outweigh any savings from faster transfers.

When done correctly, however, the benefits of stablecoin payments clearly outweigh those of fiat. I’d be fairly confident in saying that crypto-savvy accountants are already suggesting the option to independent contractors.

Fear stalls adoption

However, as long as the general public views stablecoins as merely a detour back into fiat currency, they will remain a niche option for payments.

The true turning point will arrive, beyond just clearer regulations, when employees actively choose to hold and spend stablecoins as everyday money rather than viewing them as a speculative “crypto gimmick.” This will happen once more regions follow the U.S. lead with the GENIUS Act.

If regulators embrace guidance, accountants become more comfortable, and consumers start to trust stablecoins as real money, stablecoin payroll could be the use case that finally takes crypto mainstream. But this requires those at the forefront of taxation — individual and company accountants — to familiarize themselves with the tax implications of stablecoins, so they can confidently guide clients through the process for the relevant jurisdiction.

Stablecoins are already proving their value, and they aren’t going away anytime soon. In July, Ripple CEO Brad Garlinghouse said that many people are anticipating the stablecoin market cap to climb as high as $2 trillion in the coming years. If even a fraction of that growth flows into payroll, it could reshape how millions of people are paid worldwide.

Robin Singh

Robin Singh is the founder and CEO of Koinly, a crypto tax platform designed to help crypto investors generate their capital gains and income tax reports. With a finance and accounting background, he worked as a lead engineer at a Fortune 100 company in the United Kingdom before launching Koinly.