Residents of nations with volatile economies are more likely to receive their salary in cryptocurrency, according to global employment platform Deel.
In its “State of Global Hiring Report” shared with Cointelegraph on Thursday, the firm found that despite the bear market in 2022, crypto represented 5% of all global payments withdrawn from the platform each month, up from 2% in the second half of 2021.
Residents of nations with unstable economic situations and currencies were most likely to make their payments in crypto, according to the report. These included countries in Latin America (LATAM) and Europe, the Middle East and Africa (EMEA).
Crypto withdrawals in the LATAM region represented 67% of the total, with EMEA countries at 24%. Those from the North American region represented only 7% of the total for crypto payments. The Asia-Pacific region was even lower with only a 2% share of the total.
In terms of asset type, Bitcoin (BTC) remained the crypto of choice, accounting for 47% of the total. The second choice digital asset for payments was Circle’s USD Coin (USDC) at 29%, followed by Ether (ETH) at 14%. Tether (USDT) did not make the list.
Shannon Karaka, head of expansion ANZ at Deel, told Cointelegraph that generally “we find that people typically only withdraw part of their salary in crypto, which may mean they’re still using it as a long-term investment vehicle as well.” before adding:
“From what we’ve seen in the field, getting paid in crypto is most attractive to three main groups of people: those who use the tool to hedge against local currency instability, those who work in jurisdictions with outdated local banking systems that can slow down down. salary and those who add some cryptocurrencies to their investment portfolio. Most of our crypto withdrawals come from LATAM and EMEA, which is probably driven by the first two use cases.”
Deel pulled the data from over 100,000 cross-border employment contracts on the platform between January and July 2022. The firm helps companies hire, onboard and pay people in different countries. It noted that LATAM tops the list of regions hiring internationally.
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Rising inflation is a concern for many countries in the Latin American region. Venezuela, Argentina, Chile, Brazil and Paraguay all have double-digit inflation, according to Trading Economics.
Reduced purchasing power using their own fiat currencies likely influenced the increase in crypto payments to regional workers.