The freelance economy is getting bigger and bigger especially after COVID-19 when millions of people were locked at home and many tried remote roles to make ends meet. And with remote work we saw a spike in using crypto for cross border payments, some companies even do their payroll in crypto because of how easy and cheap it is compared to traditional banking services. It no longer takes weeks to clear the payment and you don’t have to pay huge commissions for SWIFT payments. It is not a secret anymore that crypto and the freelance economy are evolving into something far more global. You can have a team of designers in Buenos Aires and programmers from New Delhi to work on your startups and it is as easy as never before to pay them with crypto. That is why many experts claim that crypto is a fuel for the growth of the freelance economy, another step for the industry just like freelance marketplaces once were.
Cryptocurrency adoption is growing unprecedentedly and now you can receive salary, pay your rent, and even pay taxes in crypto in some jurisdictions. In some countries banks consider crypto as a possible collateral when issuing a loan. All this means that crypto quietly becomes the financial basis for a growing segment of independent work. It makes the payment process faster, keeps transaction fees low, and removes geographic barriers that once were a big deal making freelancing complicated. For millions of professionals who work remotely, crypto is a great tool for making their life easier.
The Structural Problems
If you work as a freelancer, you have to operate in a complicated economic environment. You have to compete with local professionals, preferably by price-and-quality ratio. And if the quality is something you can control better, the price may not be as flexible and straightforward to adjust due to banking regulations and complexity of sending money abroad to some jurisdictions. That’s literally because in most of the cases cross border payments involve multiple financial intermediaries that make the transaction possible. Each step during the transaction requires a separate fee paid. And the currency conversion spreads is another thing that silently reduces the final amount received. That is how a two thousand dollar invoice can shrink noticeably by the time it reaches your local bank. Things get even worse when it comes to smaller sums and tight budgets where SWIFT commissions can cut a significant share of the pay.
Blockchain brought a completely different model where instead of routing funds through correspondent banks, payments can be made from one side to another using peer to peer transfer. Instead of waiting for bank working hours to complete the transaction, it happens within minutes if not seconds. Stablecoins are being particularly transformative. Freelancers can invoice in stablecoins and receive exactly the same amount that is easily convertible to their local currency.
For a remote professional receiving payment in stablecoins can preserve purchasing power during inflation cycles. For a developer from one of the African countries, crypto offers an alternative to limited banking systems. For a writer in Southeast Asia, transaction fees are minimal compared to what he will experience using the traditional banking system. Many online businesses such as fun777 use crypto not only for payouts but for payroll as well. Gaming and digital entertainment industries already integrated crypto proving that microtransactions can happen with minimum to no transaction fees.
Micropayments and the Creator Economy
The freelance economy is very close to the creator economy. Writers, video editors, podcasters, designers, and coders monetize niche skills and audiences while sitting at home and avoiding traditional offices. Not all of them make hundreds of thousands of dollars and that is why most freelancers seek to find a way to manage their micropayments in the fastest and cheapest manner. And crypto is perfect for micropayments even if it feels a bit not easy to use by non tech-savvy people. But most creators already understand that the majority of their fanbase are already familiar with crypto and use it to pay for goods and services online. And when your fans have crypto, it means that they can send small donations almost instantly. Not to mention that there are a few subscription models that support crypto as a matter of payment.
Crypto is a key for innovation in the creator economy because this new method of payments allows creators to test new formats of interaction with their audience without worrying about processing fees. Freelancers, in turn, are not limited to what their banks or payment providers think of their transactions. They can receive any amount of funds without the hassle of complying with all the banks’ requirements and compliance terms.
Some may say that crypto is not allowed in all the jurisdictions and there still can be issues when you try to exchange stablecoins for fiat money. And that is a true statement as the regulatory landscape is very different by jurisdiction. Tax reporting is different, legal status is complicated and volatility still remains a question when we are not talking about stablecoins. And we are not even touching cybersecurity questions and how holders should manage their crypto wallets and protect private keys from being compromised.
Corporate and Freelance Adoption
More and more big companies are beginning to pay their employees and contractors in stablecoins. This is especially relevant for tech and digital sectors where business owners know how flexible crypto is in many aspects when it comes to money transfers. Some firms offer to pay salaries in crypto partially while others offer full crypto payouts to anyone interested.
Payment processors feel this wind of change and are starting to integrate stablecoins into their ecosystems like PayPal who offered Bitcoin and stablecoin transactions but limited to the US and UK customers. So it is fair to say that we should expect more steps from Payoneer and Stripe towards crypto adoption if they don’t want to lose a significant portion of the market to PayPal and other players.
