In December 2020, Russell Okung became the first NFL player to be paid part of his salary in Bitcoin. Other pro-athletes have followed suit, with Aaron Rodgers announcing in October 2021 that he would also be paid partially in Bitcoin and Trevor Lawrence placing his signing bonus in a cryptocurrency account in April 2021.

Besides pro athletes, other high-profile people, including mayors and celebrities have said they are taking all or part of their salaries in  cryptocurrency. But should you? And if so, how much should you allocate towards it?

Bitcoin salaries  don’t exist on a large scale, and the practice is typically reserved for people with large disposable incomes, according to Deel, a payroll and compliance provider. 

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Cryptocurrency paychecks are counted as and taxed like other forms of income. It may benefit high earners in the tax bracket who have to pay 37% income tax, given that the tax on capital gains from crypto investments is only 20%, Deel says.

Carl Runefelt, founder of the crypto wallet company Kasta, currently pays all of his employees purely in cryptocurrency.

Employees at his company can choose between common cryptocurrencies like Bitcoin and Ethereum as well as stablecoins like USDT. Stablecoins are less volatile than other forms of cryptocurrency and are for those in the company who are more risk averse, Runefelt said.

“I actually only hire people that are very passionate about crypto,” Runefelt said, “It’s a roller coaster and it’s not for the faint of heart.”

Despite his passion for cryptocurrency, Runefelt points out that the average employee with little savings should not be getting paid in cryptocurrency, especially if they lack an effective safety net and have a low risk tolerance.

“For someone who’s literally living paycheck to paycheck, I actually wouldn’t recommend getting fully paid in crypto,” Runefelt says, “The average Joe has a much lower risk tolerance than a football player.”

Nick Casares, head of product at PolyientX, a platform for nonfungible token projects, believes a smart allocation of crypto assets is key.

“The question I would be asking myself if I were paid in crypto is, ‘How much of my salary am I willing to risk on this investment?’ much in the same way that you might evaluate an investment allocation toward a 401k or a traditional savings vehicle.”

America Competes Act may impact crypto payment regulation

Currently, the landscape of crypto payments is based largely on guidance from different government agencies and is not heavily enforced.

FINRA and the SEC have previously released guidance for many different types of cryptocurrency and blockchain enabled transactions, specifically put in place better customer identification processes and more anti-money laundering provisions, according to Federico “Fed” Baradello, founder and CEO of Finalis, a regulatory compliance back office startup.

“This new emerging asset class has resulted in customers, perhaps not really fully, or investors not fully appreciating the risks that they were getting into, or have become effectively opportunities for cybercriminals,” Baradello says. 

According to the FTC, cryptocurrency payments do not come with legal protections the way that credit and debit cards do. If a transaction goes wrong or is not the amount that both parties agreed on, there is little you can do.

For example, in the past year, the Squid Game token went from a few dollars to several thousand dollars, but a mechanism in the token prevented everyone but a select group from being able to sell, causing it to effectively amount to a pump and dump scheme, according to Mashable.

As a result, there may not be enough protections in place for consumers or people who may rely on crypto for compensation.

However, a new provision of the America Competes Act from the White House will give the Treasury the ability to ban financial transactions that could involve money laundering, which would include cryptocurrency payments.

A tweet from Jerry Britto, executive director of the Washington-based crypto think tank Coin Center, criticized the move: “The so-called “special measures” provision (proposed by @jahimes) would essentially give the Treasury Secretary unchecked and unilateral power to ban exchanges and other financial institutions from engaging in cryptocurrency transactions. How would it do this?”

Michelle Shen is a Money & Tech Digital Reporter for USA TODAY. You can reach her @michelle_shen10 on Twitter.