Despite the market meltdown, according to Deel, there has been a surge in employee crypto payments for the first half of this year.
According to the global employment site Deel, citizens of countries with unstable economies are more likely to receive their income in crypto.
Despite the 2022 bear market, crypto accounted for 5 percent of all worldwide payments withdrawn from the platform each month, up from 2 percent in the second half of 2021, according to the company’s “State of Global Hiring Report,” which was released on July 21.
According to the survey, citizens of countries with unstable economies and currencies were more willing to accept payments in cryptocurrencies. These included nations in Europe, the Middle East, and Africa, as well as LATAM nations (EMEA).
LATAM countries accounted for 67 percent of all cryptocurrency withdrawals, while EMEA countries made up 24 percent. Just 7% of all cryptocurrency payments were made by people in the North American region. Even worse, the Asia-Pacific area only made up 2% of the total.
With 47% of the market, Bitcoin (BTC) continued to be the most popular cryptocurrency in terms of asset type. Circle’s USDC, which had a 29 percent market share, came in second place and was followed by Ethereum (ETH), which had a 14 percent market share. The list does not include USDT from Tether.
Deel’s Shannon Karaka, Head of ANZ Expansion, stated that generally, “we find that people typically only withdraw part of their pay in crypto, which could mean they are still using it as a long-term investment vehicle as well,” before adding:
“From what we’ve seen in the field, getting paid in crypto is most attractive to three main groups of people; those who use the tool to hedge against local currency instability, those working in jurisdictions with dated local banking systems that can slow down payroll, and those who are adding some crypto coin to their investment portfolio. The majority of our crypto withdrawals are coming out of LATAM and EMEA, which is likely driven by the first two use cases.”
Between January and July 2022, Deel collected the data from over 100,000 cross-border worker contracts on the platform. The company assists companies in legally hiring, onboarding, and paying employees abroad. It was noticed that LATAM topped the list of foreign hiring regions.
Many Latin American nations are concerned about the region’s rising inflation rate. A double-digit inflation rate is present in Venezuela, Argentina, Chile, Brazil, and Paraguay, according to Trading Economics.
The rise in crypto payments to local workers is likely a result of their declining purchasing power using their own fiat currency.