New Zealand will now authorize payment of wages through Bitcoin and other cryptocurrencies. This makes it the first country to adopt this payment method.
Given the difficulties cryptocurrencies face in asserting themselves as a payment currency, this measure has positive repercussions in this regard.
The adoption of cryptocurrencies by governments and financial institutions is crucial to their democratization. Germany last year recognized Bitcoin as a means of payment. This time around, New Zealand ruled on the legitimacy of Bitcoin and other digital currencies.
As of September 1, New Zealand will legally receive the salary in ragged coins. This decision was announced in an Internal Revenue Bulletin document and covers all workers except self-employed workers.
However, the cryptocurrency in question must be linked to the country's official currency. That is, one of the requirements in this measure is that it is possible to convert cryptocurrency directly into any official currency of a state. Thus, the list of cryptocurrencies is limited to those that can be traded directly on exchanges such as Coinbase.
Despite difficulties for the New Zealand Tax Authority in controlling payments with cryptocurrencies, they must be taxed.
Where a payment is given in crypto assets, the employer must collect the net amount of the crypto assets given to the employee by calculating PAYE. About the legislation it is unclear whether an employee who regularly receives part of their normal remuneration in cryptocurrencies is subject to PAY or whether FBT is valid. Both views are debatable.
Thus, this measure affirms the presence of Bitcoin and other cryptocurrencies in the lives of New Zealand citizens.
Cryptocurrencies, with all the difficulties of adoption, have several attributes that give them the title of "currency of the future." Facebook itself is investing heavily in its Pillar and claims it will be the first global currency.
Did you know that you can pay with Bitcoin in Portugal?