Times of economic hardship like the present state of the practically entire world is always a tough period of any kind of savings or pension fund. In theory, these are the bridgehead against future uncertainty and the period in anyone’s life when they cannot work anymore. Now, however, these financial safety nets are also under the pressure of the growing toll that the COVID-19 pandemic is having on the overall state of both local economies and the global financial ecosystem.
That is why no one is surprised by the fact that this unprecedented crisis finally reached the pension funds, as well as the ability of ordinary workers to maintain them. But, along with the fact that the pandemic is changing almost every aspect of modern life, along with emphasizing the need to evolve, so too does the concept of a pension mutates. In this case, a recent decision by a crypto company shows that there is room in the process of evolution for cryptocurrencies.
Here, however, unlike previous notions of simply starting up a bitcoin digital wallet and beginning a saving process with it, today BTC can be employed much more directly. This not just allows for more flexibility when it comes to building up a pension fund, but also offers a glimpse into an area that so far did not see any traction – personal retirement plans that utilize crypto along with the primary fiat payment option.
Thanks to the Bitwage company, employers who are struggling to meet other conditions that the government loan program in the US set now have another option. It comes in the form of something that would be pure fantasy only five years ago – a new 401K plan based on bitcoin. For good reason, Bitwage is calling this a world-first option. This crypto payroll company tried its bitcoin 401K employee pension account recently. Now, it will begin offering companies the same plan.
This is especially related to all those who are trying to reach the 75 percent payroll requirement in the federal PPP or Payroll Protection Program. So far, the same PPP scheme has been an essential lifeline for all US businesses that are under pressure from the coronavirus pandemic and the incredible range of issues it brought about. Nationwide, the PPP and its 660 billion USD budget have been lent through the SBA or the Small Business Administration. It aims to help businesses keep their staff instead of cutting down on their employee numbers.
That is why the program offers 100 percent forgiveness of all loans if the employees use 75 percent or more of these funds on their payroll expenses. Besides, the SBA also comes with things that cover retirement benefits that are in the same category as payroll expenses. That is why developing a part of those loans into individual employees’ 401K plans will bring companies close to the 75 percent target. Bitwage has a big chance for its program in precisely this domain.
Bitwage believes that its program is allowing the companies to take the opportunity of profit sharing or matching for their contributions to their workers’ 401K accounts. That will help the same businesses close the gap and get them full SBA loan forgiveness. With the PPP program, the same bitcoin-based 401K plan will help any employer get more from their PPP loans. At the same time, the Bitwage plan offers employees an innovative option for retirement investment.
Presently, there is no doubt that many businesses would consider this, as long as it helps with the PPP scheme in any shape or form. In the current and upcoming economic state of the US, just like the world, the ability to overcome the next few months financially might be the line between keeping up with the operations or going bankrupt.
Bitwage Track Record
The San Francisco-based company is not a strange or unusual payroll solution, as well as other options that aim to integrate bitcoin and other cryptocurrencies into everyday life. Initially, as the name of the company shows, the Bitwage concept was all about companies offering their employees the possibility of getting their wages in crypto. In the age of esports and other digital ventures, this is actually a process that is more and more in demand in many professional quarters of the US economy.
Currently, the company remains focused on the US market, but it is also signing in more and more international clients. Now, it is offering fiat support in over 18 different national currencies. The latest offer is a further showcase of the same company branching out in a dynamic manner and trying to offer options for those who are struggling with currency in the wake of the COVID-19 coronavirus pandemic.
Time for Diversification
The key element that Bitwage offers is the ability of employees to use traditional asset classes like bonds and equities just like bitcoin and other cryptocurrencies. This way, anyone can get a part of their 401K plan in a range of different forms. That is something that many are undoubtedly looking to do, but usually do not branch out because they check out BTC, for example, and decide that they either do not understand it or that they do not want the hassle of getting it.
However, integrated solutions are a way out of that problem for the crypto community. Otherwise, it would be unrealistic to expect people, mostly middle-aged or thereabout, to invest their time and effort in unlocking the user mechanisms of bitcoin and cryptocurrencies in general. But, what is undoubtedly true is that the same people understand the dangers of possible massive inflation coming their way. The same applies to the US as much as any other country in the world.
With a part of their retirement in bitcoin and cryptocurrencies, they can have a peace of mind that these funds will not correlate – at least not all of the time – with the rest of traditional assets. That protection of a part of their retirement funds might be the best possible way to get future adopters in a demographic that is presently not overly interested or supportive of bitcoin.