On March 9, President Biden signed an Executive Order (EO) on Ensuring Responsible Development of Digital Assets. Noting growth of cryptocurrencies in recent years and that other countries are exploring issuing their own digital currencies, the EO creates a “whole-of-government” approach to addressing the risks and benefits presented by cryptocurrencies and the technologies allowing them to function.
The EO directs federal agencies to work collaboratively to create strategies to:
- Protect consumers, investors, and businesses in the United States
- Protect U.S. and global financial stability and mitigate systemic risk
- Mitigate the illicit finance and national security risks posed by misuse of digital assets
- Reinforce U.S. leadership in the global financial system and in technological and economic competitiveness, including through the responsible development of payment innovations and digital assets
- Promote access to safe and affordable financial services
- Support technological advances that promote responsible development and use of digital assets
By September 5, 2022 (within 180 days of the EO), the Secretary of the Treasury is directed to report on “the future of money and payment systems.”
Payroll Implications
As cryptocurrencies have become more widely accepted as a form of payment by the general public, there has been increased interest in the legal implications of paying employees in cryptocurrency. While there are service providers that will convert wage payments to cryptocurrencies, there are many questions that need to be clarified before employers pay employees directly in these currencies. For instance, at the federal level, the Fair Labor Standards Act (FLSA) requires that wages be paid in “cash or negotiable instruments payable at par.” Similarly, at the state level, some states require payment in U.S. currency. As a national strategy is developed pursuant to the EO, some of these questions may begin to be answered.
To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!
Curtis E. Tatum, Esq., is APA’s In-House Counsel and Director of Federal Payroll Compliance.
