Bitcoin has been embraced well by tech-savvy Japan. Japan was one of the first country’s to make Bitcoin a legal entity. Not surprisingly then, crypto asset is rising in popularity in Japan with an increasing number of retailers accepting it as a form of payment.
While blockchain companies have been paying their workers in crypto assets for years, but one realizes that the times are truly changing when mainstream companies start paying their workers in bitcoin.
GMO Internet Group, a Japanese provider of a full spectrum of internet services for both the consumer and enterprise markets, is introducing a system for employees to receive part of their salary in Bitcoin.
The company with its headquarters in Tokyo comprises of more than 60 entities spread across 10 countries. In view of the group’s size and financial muscle, this initiative is likely to boost the adoption of the practice of paying salaries in crypto assets at a mainstream level.
The move is partly motivated by the desire to promote the adoption of Bitcoin, which is a priority for GMO as the group is highly active in bitcoin trading and mining services, as well as mining hardware development.
In May 2017, GMO launched a crypto asset exchange, initially dubbed Z.com Coin and later rebranded as GMO Coin, which showcases crypto asset FX and allows trading on both computers and smartphones.
The exchange offers two types of services: crypto asset FX, which is an over-the-counter (OTC) bitcoin margin trading and crypto asset trading, which enables buying and selling of virtual currency in Japanese Yen in addition to basic features allowing customers to send and receive bitcoins.
In September 2017, GMO also announced the upcoming launch of a new bitcoin mining business.
“We will operate a next-generation mining center utilizing renewable energy and cutting-edge semiconductor chips in Northern Europe,” GMO stated, laying emphasis on investing in R&D and manufacturing of hardware including the next-generation mining chip.
GMO expressed its belief that crypto assets would develop into a set of new universal currencies available to anyone from any country or region who wants to freely exchange value — this would help in creating a new borderless economic zone.
Mechanism of Bitcoin salary payments
The option to receive part of the salary in bitcoin will initially only be available to employees of one GMO company, GMO Internet Co. Ltd. — starting this March, but it will be gradually extended to more than 4,000 employees in other GMO companies based in Japan.
The minimum bitcoin payment will initially be 10,000 yen (~$88) and the upper limit will be 100,000 yen (~$881). Each salary payment in the yen will be reduced by the amount of bitcoin paid, using the exchange rate at the GMO Coin exchange.
Mainichi Japan notes that Japan’s labor code stipulates that businesses must pay employees in a recognized currency such as the Yen, but, according to GMO, the move is in accordance with the law because any payments in bitcoin would be consensual, with a chosen amount to be deducted from paychecks and put toward purchasing bitcoin.
GMO Internet Group wants to get actively involved in the development of crypto assets in the world by promoting crypto asset-related initiatives throughout the group. In particular, GMO wants to promote ownership of bitcoin among its employees, who in turn, can be the best evangelists for the group’s products and services related to the digital currency. This move would also improve the employees’ exposure to and understanding of Bitcoin.
“Employers can now pay employees a portion of their net earnings in bitcoin by collaborating with niche payroll solution providers such as Bitwage, Wagepoint, or Bitpay, who manage the back-end mechanics, eliminate exposure to price volatility, and reduce compliance and governance risks,” noted Deloitte principal Eric Piscini.
Merits of paying salaries in Bitcoin
An overview of crypto asset payroll processors and early adopting clients suggests that offering salaries in bitcoin could make it easier for companies to retain and attract talent. Besides compensating current employees, they could also help businesses more effectively tap into the open talent economy, where individual contributors may be drawn to features that only crypto asset makes possible: fast peer-to-peer payments across country borders with minimal friction (or total freedom) from traditional banking systems,” said Piscini.