APA Report: Roadblocks to the Blockchain
An Analysis of Regulatory Hurdles for the Payment of Wages With Cryptocurrency
The interest in receiving wages in the form of cryptocurrency has magnified over the past few years. What was once a niche market for those on the cutting edge of new technology has grown into a standard topic of discussion for employers, employees, payroll professionals, and government leaders. The increase in interest raises questions about the best way to manage and regulate a form of currency that was not originally considered in wage payment laws impacting payroll management.
The American Payroll Association’s (APA) Government Relations Task Force (GRTF) Electronic Payments Subcommittee set out to understand the compliance and operational challenges and offer recommendations to payroll professionals and their employers as well as to government entities. For legal and regulatory challenges in which solutions are more elusive, the GRTF seeks to create an ongoing dialog to aid stakeholders in constructive discussions.
Key topics include:
- An in-depth guide to understanding cryptocurrency
- The current regulatory climate on cryptocurrency for employee pay
- PAYTECH, July 2022, "Reigning in Payroll Could Move Markets Closer to Payroll" (pages 46-47)
- Payroll Currently, Issue 4, Vol. 30, "Biden Signs Executive Order on Digital Assets"
- APA News, What to Know About Cryptocurrency and Wage Payments (1-28-22)
- PAYTECH, November 2021,"Special Section: Cryptocurrency's Impact on Payroll" (pages 12-18)
- PayState Update, Issue 24, Vol. 23, "Cryptocurrency and State Wage Payment Requirements – What Employers Need to Know" (12-20-21)
- PAYTECH, March 2019, "Cryptocurrency – A New Way to Pay Overseas Suppliers?" (pages 38-40)
- APA's The Guide to Successful Electronic Payments (available as an eBook, which is free for APA members)
Federal Agency Guidance
- Executive Order 14067, "Ensuring Responsible Development of Digital Assets" (87 F.R. 14143, 3-14-22)
- Compliance Assistance Release No. 2022-01: 401(k) Plan Investments in "Cryptocurrencies," U.S. Department of Labor, 3-10-22
- IRS Notice 2014-21, This notice describes how existing general tax principles apply to transactions using virtual currency (2014-16 IRB 938, 4-18-14)
- Internal Revenue Service Resources