New Zealand has just become the very first country to legalise the payments of salaries in cryptocurrency. Companies will now be able to pay their employees in crypto as from September 1, 2019. New Zealand’s tax agency passed the ruling stipulating that all salaries and wages may now replace the NZ dollar on payslips and companies can still deduct income tax through the country’s pay-as-you-earn system.
The ruling stated that salaries can be paid in crypto so long as the digital coin in question is “pegged” to at least one fiat (standard) currency – requiring that the crypto of choice can be directly converted into a standard form of payment. The ruling excludes self-employed workers from switching their income means to crypto.
The country announced its decision just two short months after social media conglomerate, Facebook announced its plans to launch their own digital coin, ‘Libra.’ Facebook proposed the new coin with hopes that its token will be backed by financial assets such as “a basket of currencies,” and US Treasury securities in an attempt to avoid cryptocurrency’s notorious volatility.
Facebook said that each of its partners will inject an initial US$10 million, so Libra has “full asset backing” on the day it launches but to date, non of that has been confirmed and Facebook continues to face relentless backlash regarding privacy concerns and its unreleased coin.