Since it implemented its Bitcoin payment option in November 2013, payroll firm Wagepoint says there are a growing number of workers dishing Canadian dollars for bitcoins.
According to Wagepoint's founder and CEO Shrad Rao, employees from 10 different firms have signed up for the Bitcoin option, and many have asked about it. In a phone communication with The Canadian Press, the executive said: "When we started off, we didn't even think we'll get one." The option was introduced last November as a side project, and the outcome was beyond their expectations.
- Shrad Rao
Last year, the Toronto-based startup became the world's first payroll software to implement a Bitcoin payment option. Wagepoint partnered up with Canadian exchange Virtex to transfer payments into bitcoins. Based on an amount fixed by the employee, Wagepoint converts the amount in Canadian dollars into bitcoins based on Virtex's current ask price. Tax deductions are handled before that conversion to avoid any potential complication.
"What's interesting is that we've actually had customers come to us because of the [Bitcoin] integration, which we were not expecting at all."
However, Rao indicated that most of these Bitcoin friendly employees came from technology companies, where workers are keen to develop disruptive innovations.
According to the executive, Wagepoint gets about 5 inquiries for Bitcoin payments per month from the US, where the company has an office in NY, but hasn't launched the option yet.
In June, the Canadian government ruled Bitcoin as property, and stated not recognizing the digital currency as a currency. Noel Carisse from tax laws administrator Canada Revenue Agency, said paying goods or services with bitcoins was considered as "a barter transaction."
Carisse told The Canadian Press in an email communication:
"The goods — the Bitcoin, in the case of digital currency — must be valued and reported in Canadian dollars. [...] The employee would then include the appropriate amount on their tax return for the year as employment income. Any tax payable would have to be paid in Canadian dollars."
But according to Rao, it works differently as the employees are paid in Canadian dollars, and that taxes are deducted from that exact same amount before any conversion into bitcoins is made. The executive noted:
"Really, it's [about] what you do with your personal income at that point. [...] If you bought a boat with it or invest in Bitcoin — I'm not sure that's very different from each other."
Still, many experts suggest that this payment system cannot reach mass adoption until there is regulation. Also, most of brick-and-mortar merchants don't accept the digital currency as a mean of payment, and overall, those who earn their revenue exclusively in bitcoins need to convert them into fiat.
Michael Perklin the president of Bitcoinsultants Inc., a Bitcoin consulting firm based in Toronto, told The Canadian Press he hasn't earned Canadian dollars since February, but still, couldn't use his bitcoins directly for most of his day-to-day purchases. However, while the executive said it might be possible to live without traditional money in the future, it is difficult today to do so:
"I have to interact with Canadian currency. [...] That's a fact of life in the country I live in."
Nevertheless, the Bitcoin landscape is evolving rapidly, attracting more and more users day by day. According to Coindesk's "State of Bitcoin Q2 2014" report, the number of Bitcoin wallets held was multiplied by 7 between June 2013 and June 2014, reaching 5.3 million units.
And while Bitcoin is gaining in popularity, employees and employers are starting to pay attention to the potentials of the digital currency. In fact, cryptocurrency-based job board Coinality experienced a 25% increase in its site traffic from job seekers, according to TechVibes.
Not only these figures illustrate the growing acceptance of Bitcoin, they also illustrate our aspiration in integrating cryptocurrencies into our lives.
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