The seemingly obsolete term “scrip” appeared in the limelight during a recent congressional hearing on Facebook’s Libra. Rep. Alexandria Ocasio-Cortez asked the company’s Blockchain head David Marcus whether there was a risk in taking his pay in the corporate-controlled cryptocurrency. Marcus never answered since AOC’s allotted time had already expired.
The question still stands — are cryptocurrencies and company script really comparable?
Crypto salaries on the rise
“Company script” refers to the practice when businesses issue specific currencies to pay their employees, which is illegal under the Fair Labor Standards Act of 1938. Some of its forms did manage to survive. Specifically, the aforementioned term is still used when companies pay wages in their own shares instead of money.
In 2019, cryptocurrency salaries are becoming a new thing. If social media giant Facebook announced its plans to pay employees in Libra, then you would expect other businesses to follow suit.
It’s not clear whether Facebook would be able to proceed with its crypto ambitions due to intense regulatory scrutiny, but receiving salaries in Bitcoin is already legal in New Zealand. The country's tax agency has determined that companies are allowed to pay in crypto as long as the digital asset is backed by a stable fiat currency.
Not so fast, crypto fans!
However, according to a recent Financial Times op-ed, New Zealand didn’t endorse Bitcoin, and this recent initiative is simply a way to formalize the tax treatment cryptocurrency salaries.
Izabella Kaminska, the author of the article, went on drawing parallels between this form of payment and company scrip, and used Kate Winslet as an example. The Oscar-winning actress, who appeared one of Who Do You Think You Are? episodes, found out that her ancestor from Sweden had to accept tokens from his estate and forced to steal potatoes because he couldn’t buy food with them.
What is wrong with Bitcoin?
Winslet’s story does showcase the injustices of the past, but that cryptocurrency comparison didn’t make any sense. Bitcoin, the decentralized cryptocurrency that is not controlled by governments and corporations, is the exact opposite of oppression.
Crypto can be instantly exchanged into fiat money without any volatility-driven losses. Moreover, it’s much easier to purchase things with Bitcoin than with a bar of gold.
There are thousands of cryptocurrencies, and one shouldn’t paint all of them with a broad brush.