Whether it’s splashed across daytime T.V., social media, or traditional press, almost everyone is talking about cryptocurrencies. Digital assets from DeFi to NFTs and everything in between have become popular. Cryptocurrency has various uses besides speculation and investing, and payments. It’s simple to overlook that people transfer wealth using crypto gateways that use cryptocurrencies like BNB, BTC, and BUSD.
Merchants like Microsoft (NASDAQ:) and Starbucks (NASDAQ:), and small businesses have started accepting cryptocurrency payments for their products and services. Typically, a payment gateway simplifies the procedure. With a crypto card, you can use crypto to pay for items in fiat currency. So whether you want to pay back a friend or purchase an item, multiple options use blockchain technology. Let’s begin the journey of why you should switch to crypto payments.
Future of currency: Crypto Payments
- Faster and cheaper transactions: ‘U.S. wire transfers cost you up to $15 in transaction fees. Instant service like Paypal is cheap, but they still charge over 3% and a flat fee for every invoiced transaction. and other crypto transactions are much faster and, more importantly, cheaper. Not only do they charge much lower transaction fees, but the sender and not the recipient also pay this fee which means you get the whole amount on your invoice.
- More convenient international payments: In today’s interconnected world, you’re likely to have clients from all over the globe. However, international payments through traditional methods take days, and the transaction and exchange fees are way too high. Crypto eliminates all intermediaries in a transaction, bringing the transaction costs along with making payments uniform.
- Confidentiality: The most significant advantage of crypto payments is that all transactions execute anonymously and safely, thanks to the layers of cryptographic security provided by the underlying blockchain technology. Besides minimizing concerns of your data getting hacked, they are also safe from snooping central authorities, unlike your credit cards or bank checks.
- No bank registration is needed: One can make crypto transactions without being registered with a bank. Given the amount of data the banks (via them, the government) collect and store these days, many citizens might want to opt for this alternative.
Why is Crypto Taxed?
Taxes, as we all know, are a fact of life. In this world, almost everything is subject to tax. Even though the market for cryptocurrencies is relatively young, one must pay taxes. The market value of the virtual currency is measured in U.S. dollars that a taxpayer gets in exchange for goods or services and gets incorporated into the taxpayer’s total income.
The taxpayer has taxable gain if the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted virtual currency. Similarly, the taxpayer realizes a loss if the fair market value of the property acquired is lower than the adjusted virtual currency. Cryptocurrency can be created through mining or bought on exchanges, and you might potentially offer it to a buyer or investment. Some users utilize cryptocurrencies to make purchases from internet retailers. That’s why cryptocurrency ought to be taxed.
What if the value of your crypto income is nosediving?
After the recent price falls across the crypto markets, many people that have had their salary paid in crypto assets may be holding less in fiat value terms than when they were paid, which means you may use tax-loss harvesting, allowing you to claim capital losses by selling your crypto assets that have fallen in value since receiving them.
How regulated are cryptocurrencies?
Cryptocurrencies may be taxed, but they are still not regulated by any central authorities, which is the point of a decentralized currency. However, this is where one of the major issues lies with getting paid in crypto. Since you’re totally on your own and there can never be any physical proof of the “money” you possess, in case your account gets hacked or you fall victim to a scam, your earnings are gone. You will get help from neither the justice department nor insurance.
All in all, should you accept cryptos as payments?
In 2022, crypto will be everywhere. Over 221 million people utilize cryptocurrencies worldwide. Every week 24 new cryptocurrencies are created, which translates to an average of three to four new cryptocurrencies daily. As you can see, both the proposition and opposition to getting paid in cryptos are strong. So, there is no easy answer to this question.
Since cryptos are investments at the end of the day, one of the most famous guidelines about investment applies here – only invest what you can afford to lose. If you’re all set on sailing into the crypto world, think first about your current financial status and future objectives, which entails going over fundamentals such as your monthly cash flow, budget, and costs to determine how much of your income you can comfortably invest in cryptocurrencies. It is best to take only partial payment in cryptos and accept financial guidance from reputed and experienced crypto and blockchain consulting experts before going in. All this sounds well and exciting, but the question remains – what does it mean for you? Will it be a good or a wrong move? Well, there is only one way to solve this. Let’s bring out the yellow pad and analyze the pros and cons.