Deel takes on DAOs' global payroll
In certain parts of the world, getting paid in crypto can save employees real money, and that's why an international payroll platform is getting more and more into crypto.
- Driving the news: Deel specializes in solving the challenge of international workers. It has legal entities all over the world, so its clients' global workers are technically employed by Deel. It's now opening its services to crypto-native businesses known as DAOs (decentralized autonomous organizations).
Why it matters: Talent is the key input in crypto, like so many other areas of technology. No one wants to eliminate superstar talent for bureaucratic reasons.
- If a worker lives in a country that doesn't typically transact much with the nation where his or her employer is located, that could have material costs for the worker.
- Between the lines: The worker has to get paid through the SWIFT system, a cooperative of banks. Sometimes, using SWIFT requires passing money through multiple banks that have commercial banking relationships, and each hop incurs a fee, as Deel explains on its blog.
Payment in cryptocurrency, such as USD coin (USDC), goes straight to the employee. Then they can swap it for local currency.
- What they're saying: "We love crypto for lots of different reasons, specifically when you're dealing with cross border and you have to deal with SWIFT," Alex Bouaziz, Deel CEO, tells Axios.
Details: Deel, which pays in more than 120 fiat currencies, has been allowing employees to get paid in crypto for a while now. They can take part of their paychecks in cryptocurrencies like bitcoin, ether, dash and others.
- The company secured a $12 billion valuation last year.
- Ready Player DAO and Endaoment are two DAOs already using Deel's new service.
What's next? Deel is opening to DAOs, organizations that don't have a legal entity anywhere.
- Of note, any entity it works with needs to have a Coinbase Pro account (which means that it would have gone through anti-money laundering and know-your-customer checks).
- "AML-wise it would be impossible to take funds from a wallet cold that we don't know the source of," Bouaziz said.
- So, DAOs that want to be fully cypherpunk and off-the-grid will need to look elsewhere.
Risk management: Different countries have different laws about an employer's responsibility to its workers. Deel effectively takes on all those obligations when it adds a DAO employee.
- Depending on the country where the employee resides, it requires upfront payments to cover that risk, such as adequate funds to cover legally required severance if the employee is let go.
Zooming out: We recently reported on Utopia, a startup that's making the back office for DAOs less complicated. A new generation of administrative companies might be getting built now.