Cryptocurrency fans may soon be able to have their paychecks directly deposited to Coinbase, one of the largest and most popular crypto exchanges. And their pay can be automatically deposited as Bitcoin or another cryptocurrency.
In a blog post on Monday, Coinbase senior director of product Prakash Hariramani announced that the direct deposit option will be rolling out in the U.S. over the next few weeks. Customers have been telling Coinbase "that making frequent transfers is time-consuming and inconvenient," Hariramani wrote. By introducing direct deposit, crypto investors can save the time and hassle involved in transferring funds between Coinbase and their other accounts.
Bitcoin, Ethereum, Dogecoin and other cryptocurrencies are far more volatile than traditional currencies like the euro or U.S. dollar. So it may seem unwise — and certainly, very risky — to routinely deposit your paycheck into an account intended for trading digital currencies.
Yet Coinbase says it's allowing customers to directly deposit any percentage of their paychecks into their accounts. Many employees already elect to have their paychecks deposited in multiple accounts — maybe 45% in a checking account, another 45% in a high-yield savings account and the rest in a 401(k). Now you can reallocate where your paycheck is deposited and perhaps have some small portion automatically steered to your Coinbase account. Or have all of your paycheck deposited that way, if you're actually comfortable with that level of risk.
Coinbase customers will also be able to choose for the money to be deposited as U.S. dollars or any of the over 100 cryptocurrencies available at the exchange, with no fees.
How to get paid in crypto
Getting your paycheck deposited as cryptocurrency to your Coinbase account is fairly simple. You can set up direct deposit in the settings section of the Coinbase app or go through your company's HR department or payroll system.
Whether or not it's smart to deposit your paycheck at Coinbase is a different matter. Cryptocurrencies are highly speculative investments, and it's much harder to get rich from crypto than Reddit and the rest of the internet may make it seem. Old-school investing legends such as Warren Buffett and Robert Shiller have expressed deep skepticism and issued warnings over the years that Bitcoin and other cryptocurrencies could tank in value or even become worthless in a heartbeat.
At the same time, interest in cryptocurrency is surging and becoming more mainstream, hand in hand with rising crypto prices. (Even after some recent declines, the price of Bitcoin is now roughly $41,500 per coin, up from $11,000 a year ago, according to CoinMarketCap.) In one survey of financial advisors, more than one-quarter said they'll increase their usage or recommendations for crypto investments next year.
If and when the Securities and Exchange Commission approves a Bitcoin ETF, which would allow people to buy the digital currency without actually purchasing coins directly, investing in cryptocurrencies will surely become even more mainstream.