Types of Cryptocurrency for Strategic Compensation

Cryptocurrency is a rapidly growing digital alternative (and supplement) to traditional currencies. Crypto operates on decentralized blockchain networks that facilitate secure peer-to-peer transactions without intermediaries.

Unlike government-issued tenders (e.g., euros, dollars, or pounds), cryptocurrencies such as Bitcoin and Ethereum utilize cryptographic verification and a distributed ledger technology to ensure transparency and permanence. For global employers, grasping these systems is critical as workforce boundaries dissolve and digital payments gain momentum.

The cryptocurrency ecosystem encompasses a diverse range of categories with distinct functions. Payment-focused coins, stablecoins tied to fiat currencies, and utility tokens for blockchain applications each present unique volatility, security, and adoption profiles. These different types of cryptocurrency influence payroll reliability, regulatory compliance, and employee acceptance. Selecting the right cryptocurrency demands careful evaluation of stability for wage consistency and adaptability for cross-border compensation.

Businesses worldwide now leverage crypto payments to simplify compensation for distributed teams. These digital assets bypass sluggish banking infrastructure, cut foreign exchange costs, and empower workers in regions with unstable local currencies or limited financial access. As crypto adoption grows, employers must strategically navigate this evolving space to remain competitive in attracting global talent.

4 Main types of cryptocurrency categories

Cryptocurrencies offer distinct advantages for global payroll best practices; however, their varied designs require careful selection. Employers should be familiar with crypto’s four primary categories to strategically align their digital finance agility with operational needs and workforce expectations.

1. Payment cryptocurrencies

Payment cryptocurrencies enable direct, borderless transactions with transparency and reduced intermediary costs. Bitcoin (BTC) remains the flagship option, prized for its widespread recognition despite price fluctuations, while Litecoin (LTC) and Ripple (XRP) facilitate faster transactions and are ideal for recurring payments.

Employers in tech-forward industries or regions with volatile local currencies often leverage these for one-time bonuses, freelance contracts, or urgent international transfers. Their decentralized nature also appeals to workers seeking financial autonomy, though real-time value tracking is essential to meet regional wage regulations.

2. Stablecoins

Stablecoins combine blockchain efficiency with the stability of fiat currencies, pegging 1:1 to assets like the U.S. dollar. USDC (USD Coin) leads with audited reserves and regulatory alignment, while USDT (Tether) dominates trading volumes. Stable, utility-centric tokens like Ethena USDe (USDE) and Dai (DAI) are other stablecoins that are gaining momentum.

“Fiat-backed stablecoins such as Tether (USDT) and USD coin (USDC) are backed by reserves of traditional currency, but they’re not directly affiliated with a central bank,” defines Allie Grace Garnett at Britannica Money.

These tokens streamline payroll by eliminating currency conversion delays and minimizing exposure to crypto market fluctuations. Crypto payroll platforms are increasingly integrating stablecoins for instant settlements, particularly in countries with underdeveloped banking infrastructures or restrictive capital controls.

3. Utility tokens

Utility tokens act as keys to blockchain-based services, from cloud computing to decentralized finance (DeFi) platforms. Ethereum (ETH) powers smart contracts for automated agreements, and Binance Coin (BNB) offers fee discounts on one of the world’s largest crypto exchanges.

Employers may use these tokens to pay vendors in Web3 ecosystems or incentivize developers who contribute to blockchain projects. Their value often ties to platform adoption, creating opportunities for strategic partnerships in tech-driven sectors.

4. Governance and security tokens

Governance tokens decentralize decision-making, allowing holders to vote on platform upgrades or fund allocations. Uniswap’s UNI token, for example, is one of the largest decentralized exchange tokens. Security tokens digitize traditional assets, such as equity or real estate, offering fractional ownership through blockchain technology.

While less common for payroll purposes, security and governance tokens underpin innovative funding models and corporate structures, enabling employers to engage with blockchain-native ventures or explore tokenized employee incentive programs.

Common cryptocurrencies used for payroll and payments

Businesses leverage cryptocurrencies to optimize cross-border transactions, reduce fees, and cater to their workforce’s preferences. Below are the top digital assets for global payroll, chosen for stability, adoption, or niche utility.

• USDC (USD Coin). A dollar-pegged stablecoin with transparent reserves, ideal for predictable payroll and accounting. Its regulatory compliance makes it a top choice for platforms like Velocity Global, ensuring wage consistency across borders.
• Bitcoin (BTC). As the most recognized cryptocurrency, it is often used for contractor bonuses or one-time payments. Global acceptance offsets volatility risks in regions with hyperinflation or currency controls.
• Ethereum (ETH). Favored by developers and Web3 teams for smart contract integrations. Tech employers use ETH to pay freelancers contributing to decentralized apps or blockchain projects.
• USDT (Tether). Offers high liquidity and rapid settlements, though businesses exercise caution due to ongoing regulatory scrutiny. Commonly used in emerging markets with unstable local currencies.
• Litecoin (LTC). Processes transactions four times faster than Bitcoin with lower fees. Ideal for recurring payments to contractors who prioritize speed over asset appreciation.
• Bitcoin Cash (BCH). Designed for low-cost microtransactions, reducing fees for small or frequent payments. Popular among startups managing significant contractor arrangements.
• XRP (Ripple). Enables near-instant cross-border settlements, handling 1,500+ transactions per second. Financial institutions use XRP for payroll transactions in multi-currency corridors like Asia-Europe.

Velocity Global simplifies crypto payroll by supporting approved assets like USDC and delivering compliant, real-time payments to employees and contractors worldwide. The company’s global payroll solutions automate conversions, tax reporting, and wallet distributions, reducing administrative burdens for global teams.

Choosing the right cryptocurrency

Adopting crypto for payroll demands a tailored approach that aligns with a company’s operational goals, workforce demographics, and risk tolerance. Here’s how businesses can evaluate their options strategically.

• Transaction speed vs. stability. Prioritize cryptocurrencies with faster settlement times for urgent cross-border payments, but be mindful of the need for stability. Stablecoins provide predictable value for recurring salaries, while payment-focused coins may be more suitable for one-time incentives where speed is critical.
• Regulatory and tax implications. Research local laws governing crypto compensation in your employees’ regions. Some jurisdictions treat cryptocurrency as taxable income, while others treat it as property. Opt for cryptocurrencies with clear compliance frameworks to avoid legal pitfalls.
• Network costs. High transaction fees erode payment efficiency, especially for small or frequent transfers. Evaluate blockchains known for low-cost transactions if managing high-volume payroll.
• Workforce preferences. Tech-centric teams may value exposure to innovative assets, while others prioritize stability. Survey employees to gauge their comfort with volatility or interest in diversification.

Despite short-term fluctuations, the crypto market continues to gain momentum in the long term. In 2025, “President Trump announced the formation of a strategic crypto reserve made up of Bitcoin, Ethereum, Solana, XRP, and Cardano,” reports Don Tapscott, Co-Founder at the Blockchain Research Institute. The current administration’s support for cryptocurrency further bolsters mainstream adoption of these digital currencies.

Strategic crypto use cases

• Recurring payroll. Stablecoins minimize currency risk and simplify accounting, making them ideal for regions with hyperinflation or restrictive capital controls.
• Bonuses/incentives. Higher-volatility coins could align with performance-driven rewards, offering potential appreciation.
• Niche industries. Businesses in blockchain, gaming, or Web3 might leverage utility tokens to align payments with platform ecosystems.
• Cross-border freelance networks. Crypto streamlines payments for global freelancers, eliminating the need for multi-currency accounts and reducing delays. Platforms catering to gig workers often prefer tokens with low fees for frequent microtransactions.
• Financial inclusion initiatives. In regions with limited banking access, crypto wallets empower employees to receive wages directly, fostering economic participation. This approach supports talent recruitment in underserved markets.

Companies on the fence about crypto can “Limit the use of cryptocurrency to bonuses,” suggests Littler lawyers Lisa A. Schreter and Justin D. Brown. “Given the variability and potential decrease in the value of a cryptocurrency, using cryptocurrency as part of a salary puts at jeopardy the salary level and salary basis requirements for exemption classification purposes,” the advisors add.

Crypto adoption isn’t one-size-fits-all. Companies in cross-border-heavy industries or those hiring in financially underserved regions tend to benefit the most. By aligning cryptocurrency choices with operational pain points—whether reducing forex fees, accelerating settlements, or attracting tech talent—employers can transform payroll from a cost center into a strategic advantage.

Utilize crypto for compensation with Velocity Global

Velocity Global streamlines crypto payroll for global businesses by supporting stablecoins like USDC. As a trusted Employer of Record solution, we automate tax reporting, currency conversions, and regulatory compliance, ensuring globally compliant payments to employees and contractors in over 185 countries. We balance compliance with localized legal safeguards and innovation through our integrated platform, simplifying payroll management and providing talent with access to digital payment preferences. Get in touch to learn more.

Disclaimer: The information provided here is for general informational purposes only and should not be construed as legal advice. For personalized guidance, consult an immigration lawyer or local legal advisor.