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Brazil's new proposal sparks global debate — here's how countries around the world approach paying wages in cryptocurrency like Bitcoin or stablecoins.
Introduction: Brazil's Bold Move
In March 2025, Brazil introduced a bill (PL 957/2025) that could make it one of the few countries to explicitly allow employees to receive part of their wages in cryptocurrency such as Bitcoin, Ethereum, or popular stablecoins like USDT. Under the proposed law, workers could opt to receive up to 50% of their salary in crypto, while the remaining portion must be paid in Brazil’s national currency, the Brazilian real (BRL). Full payment in digital assets is prohibited, except for foreign-based workers and independent contractors, who may receive 100% of their compensation in crypto under contractual agreement.
To safeguard workers, the bill also mandates:
- Written agreement between employer and employee
- Conversion using the official exchange rate set by a Central Bank-authorized institution
- Detailed payslips showing fiat and crypto portions
- Free financial literacy programs about crypto, blockchain, and associated risks
This development pushes the conversation around crypto salaries (that is, using cryptocurrencies such as Bitcoin, Ethereum, stablecoins, or even meme coins to pay salaries, wages, or contractors’ compensation) into the legal mainstream. For small and medium-sized tech companies in sectors like blockchain, fintech, gaming, or crypto itself — understanding where crypto compensation is allowed, restricted, or outright banned is now more relevant than ever.
Countries That Allow Crypto-Based Salaries
🇧🇷 Brazil (Proposed Bill)
- Status: Proposed in early 2025 (PL 957/2025)
- Key features:
- Up to 50% of salary can be paid in crypto
- Full crypto salary allowed for contractors and foreign workers
- Employers must provide financial education and use official exchange rates
- Legal angle: Crypto is not legal tender; written consent is required from the employee.
🇸🇻 El Salvador
- Status: Bitcoin is legal tender since 2021
- Key feature: Employees can receive salaries in Bitcoin but must have the option to be paid in U.S. dollars instead
- Note: Enforcement of the Bitcoin Law remains inconsistent; employment protections lack clarity.
🇦🇪 United Arab Emirates (UAE)
- Status: Permitted as supplemental compensation in free zones (e.g., DMCC, ADGM), but base salary must be paid in AED (local currency) under federal law
- Key features:
- Crypto bonuses allowed with clear contractual terms
- Subject to licensing and AML/KYC compliance under free zone authorities
- Legal angle: Crypto is not legal tender. Employers must ensure compliance with the Wages Protection System (WPS) and relevant free zone regulations.
🇨🇷 Switzerland
- Status: Crypto can be used as salary if mutually agreed
- Key features:
- Crypto is treated as intangible asset
- Taxed based on CHF (local currency) equivalent at time of receipt
- Legal angle: Crypto is not legal tender; governed by Swiss labor and contract law and subject to AML compliance.
🇵🇹 Portugal
- Status: Crypto salary arrangements may be possible by mutual agreement, but are not explicitly regulated
- Key features:
- Employers must comply with euro-based minimum wage laws
- Crypto received is taxed depending on holding period
- Legal angle: Private agreements are permitted; there is no formal employment regulation on crypto wages.
🇸🇬 Singapore
- Status: Permitted, but must be carefully structured to comply with tax, labor, and financial regulations
- Key feature:
- Written agreement required between employer and employee
- Salary must be denominated in SGD
- Crypto is treated as income for tax purposes
- Legal angle: Crypto is not legal tender; payroll arrangements must comply with employment, tax, and AML laws.
🇯🇵 Japan
- Status: Allows digital salary payments that are convertible to yen; direct salary payments in crypto (e.g., Bitcoin or Ethereum) are not permitted.
- Key features:
- Salary must be paid via regulated digital payment providers licensed under the Payment Services Act
- Payments must be convertible to yen, with fee-free fiat withdrawals available at least once per month
- Bonuses may be paid in crypto with employee consent, valued in yen, and subject to tax withholding
- Legal angle: Crypto is not legal tender; only regulated, yen-backed platforms are permitted for payroll.
Countries That Restrict or Ban Crypto Salaries
🇪🇺 European Union
- Status: Varies by member state
- Examples:
- Permissive: Romania, Estonia — crypto wages allowed under mutual consent
- Restrictive: Germany, France — wages must be paid in fiat; crypto wages discouraged
🇺🇸 United States
- Status: Permitted but complex, and subject to strict documentation
- Key concerns:
- Federal and state labor laws (e.g. minimum wage in USD) must be observed
- IRS treats crypto as property; fair market value reporting and tax withholding (e.g., W-2) is required
- Crypto may only be used as a supplemental bonus, with employee consent
🇨🇦 Canada
- Status: Permitted but complex, and subject to strict documentation
- Caution:
- Crypto is treated as barter/property which complicates payroll
- Payment of crypto salary is subject to federal and provincial employment law requirements
- Strict tax law requirements as well as FINTRAC requirements must be considered.
🇨🇳 China
- Status: Explicitly banned
- Notes: Crypto transactions are illegal; salaries in crypto are prohibited
Crypto & Remote Work: What’s Really Happening
Even in countries where paying salaries in crypto is restricted or not allowed, many tech (especially blockchain) startups and Web3 companies are using stablecoins (like USDT or USDC) to pay remote freelancers and contractors.
Why companies do it:
-- It’s fast, low-cost, and works across borders without traditional banking delays.
Who’s doing it:
-- Crypto-native startups, DAOs (decentralized autonomous organizations), and remote-first teams working across countries.
Why it’s risky:
-- If not properly structured, these payments could violate labor or tax laws in the freelancer’s home country — especially if:
- The person is actually working like a full-time employee
- Required income tax reporting is skipped or unclear
Tip: Even if you're paying or working as a contractor, it’s smart to check local legal and tax rules — or speak with a lawyer — to stay on the safe side.
Legal & Tax Considerations for Using Cryptocurrency in Salary Payment
Paying employees or contractors in cryptocurrency (such as Bitcoin, Ethereum, or stablecoins) is still relatively new but quickly gaining traction as an innovative payment option. While it offers flexibility and borderless convenience, it also comes with legal and tax responsibilities that businesses should carefully understand and manage.
Employment Law Considerations:
Labor laws in many countries mandate that wages meet minimum wage thresholds in local fiat currency. Even when crypto is allowed as a supplementary payment method, such as in Brazil's proposed law or in Switzerland or Romania, a portion of the salary often must still be paid in fiat.
Clear written consent from employees or contractors is almost always required, and this agreement should outline not only the amount but also the method of crypto payment and the exchange rate mechanism.
Tax Law Considerations:
The volatility of cryptocurrencies complicates payroll calculations and reporting. In jurisdictions like the United States and Canada, where crypto is treated as property, employers must calculate and withhold taxes based on the fair market value of the crypto at the time of payment. This requires accurate valuation, meticulous recordkeeping, and the ability to issue payslips that meet both tax and labor law standards.
In countries like Portugal and Singapore, crypto received as income is also taxable, but the treatment may vary depending on whether the gains are short-term, long-term, or tied to business activity.
AML and KYC Considerations:
Anti-money laundering (AML) and know-your-customer (KYC) obligations also come into play, particularly for employers operating in regulated sectors or jurisdictions with robust compliance regimes. Businesses must ensure that crypto payments are not used to circumvent identity verification, avoid tax reporting, or facilitate cross-border payments to sanctioned individuals or entities.
Operational Considerations:
Companies must prepare for operational issues such as currency conversion and dispute resolution. Agreements should include clear terms about the crypto-to-fiat conversion rate, the timing of conversion, and procedures in the event of a payment dispute due to price fluctuations. Using a reputable exchange rate source and including conversion terms in employment or contractor agreements will help mitigate risks.
Final Thoughts: Adoption of Bitcoin and Cryptocurrencies
Brazil’s move is bold, but it's also part of a growing global conversation. For startups and tech companies operating across borders, crypto compensation introduces both opportunity and legal complexity.
The best approach? Clarity, contracts, and compliance. Before offering or accepting crypto as compensation, understand the rules in your jurisdiction and ensure you're not putting your team (or your company) at legal risk.
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