Mainstream companies are readily offering to pay their employees in crypto these days. With the adoption on the rise, more and more people have started accepting digital currencies like Bitcoin, Ethereum, Tether, etc., as payment means. However, in China, the landscape remains to be quite hazy.
Local court provides clarity
According to a recent Beijing Daily report, a Chinese court has ordered that neither crypto nor stablecoins like Tether be used to pay wages.
A recent labor dispute judgment issued by the Chaoyang Court asserted that virtual currency “should not and cannot” be circulated in the market as a currency.
Per the translated version of The Beijing Daily’s report, Shen, the Vice President of Products of a network technology company, was entitled to a monthly salary of 50,000 yuan. After knocking off social security and provident funds, his actual compensation was paid “RMB 2,574 plus virtual currency USDT.”
Notably, in June 2020, the employee put down his papers. Post negotiations, however, he was asked to stay back until the project was completed. The company allegedly did not entitle him to performance bonuses and overtime pay, and there were arrears concerning his usual compensation.
Shen chose to take legal action and demanded that the company clear all its dues. However, with the company no longer existing, the employee sued the two shareholders, Hu and Deng.
The final verdict
In response to the lawsuit, Hu clarified that the company had paid the salary in Tether. Shen had, however, asked the company to pay its arrears in RMB. Per The Beijing Daily,
“The court held that the “Labor Law” stipulates that wages should be paid to the laborer himself in the form of currency on a monthly basis. “
The report further highlighted that administrators in China do not weigh virtual currency and RMB on the same scale.
“On September 15, 2021, the “Notice on Further Preventing and Disposing of Hype Risks in Virtual Currency Transactions” issued by the central bank, the Supreme People’s Court, the Central Cyberspace Administration of China and other ten major departments stipulates that virtual currency does not have the same legal status as legal tender.”
The court, thus, ruled that Shen’s request to pay wages in the form of RMB “complies” with the law. Resultantly, Hu and Deng were ordered to pay the RMB arrears of salaries and bonuses.
Stablecoins like Tether are no more stable
Over the past few weeks, many stablecoins have lost their $1 peg. It all started with Terra’s UST, and with time, stables like Tether were also affected by the contagion. Panic and market manipulation, along with redemptions, had triggered Tether’s de-peg in conjunction.
Read More: Why Tether USDT Dropping To $0.94 Was More Than Just Market panic
Even though with time, things got back on track for USDT, investors’ and regulators’ faith in stablecoins has been shaken. Resultantly, countries like China got another reason to make their hostile stance even more concrete.
However, the company’s CEO Paolo Ardoino took Twitter on Wednesday to draw the line between stablecoin stability, liquidity, and redemptions. Differentiating between what’s safe and isn’t, he tweeted: