New Zealand first in the world to legalize salaries paid in cryptocurrencies

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According to Mr Nikou Asgari at Financial Times, New Zealand is the first country in the wold that legalizes salaries paid in cryptocurrencies. The government of New Zealand announced the news earlier this month. Mr Asgari, claims that New Zealand’s tax authority decision enables salaries and wages to be paid as long as payments are in periodic, set quantities in cryptocurrencies such as bitcoin from September 1. ‘Self-employed taxpayers’ are excluded from the scheme. The digital currency of choice must also be attached to at least one periodic currency and can be transformed straight into a normal payment form.

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Moreover, Mr Matthew De Silva at Quartz, confirms that New Zealand has accepted cryptocurrencies as compensation for wage-earning employees under a rigorous framework. Cryptocurrency payments must be subject to an employment contract, be for a set sum, and include a periodic portion of the remuneration of the employee. According to Mr Matthew De Silva New Zealand’s tax authority emphasizes on the crypto-asset’s important aim to operate as a currency. Therefore, the tax authority released an indicative list of approved cryptocurrencies such as: bitcoin, bitcoin money, bitcoin gold, ether, and litecoin. On the other hand, the authority has excluded the use of: filecoin, dentacoin, and CRYPTO20.

Cryptos “pegged to one or more fiat currencies,” such as Tether and the Paxos Standard, are also okay for use as wages and salaries. Only stablecoins that are readily convertible into fiat money on an exchange satisfy the rules, the agency stressed.

Source: Quartz
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Furthermore, Mr Matthew De Silva claims that New Zealand’s pioneering strategy with respect to monetary decisions could play the role of a prodigy affecting the financial direction of other ‘regulators.’ As an example, the IRS in the United States has not given any update with respect to cryptocurrencies during the last five years while this has been mostly anticipated by ‘crypto enthusiasts’.