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Comment by nailer | Hacker News Reader

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And how are you supposed to convert USD to USDC to local currency at par? The exchange fees end up eating any savings you got from not using the normie SWIFT network, and then at tax filing time you have to account for paying / being paid in specie instead of cash.

- USDC to local currency at par

I edited my comment above to provide answer. Swap whatever stable to PyUSD (negligible) and then send to your Solana address in Paypal. You can also hold crypto in US banks pretty soon.

This all makes sense... if a YC startup is going to spend the majority of its funding outside the US. I'm having trouble thinking of such a scenario though. I'd expect YC money to be spent on rent, founder salaries, and API calls.

> Transferring money across regions with the best 'normie' tools (eg Transferwise/wise.com) is multiple orders of magnitude more expensive than $0.0000015 (tranferring USDC or another GENIUS-compliant stablecoin on Solana).

I don't see how that's relevant to YC startups. Startups can't legally pay their employees in crypto through transfers, any more than they can write checks out of their bank account or pay their employees in cash. I've paid an overseas employee in BTC before, but we still had to go through a payroll provider and do everything above-board to satisfy IRS requirements.

I'm curious why you can't legally pay in crypto? I heard a few times about companies paying in crypto to their remote workers. In fact I heard that a US company was paying in BTC withing the US, though I'm not sure I trust this particular story. I also see that Deel accepts USDC, and to my understanding they convert to local currency of the remote worker. Is that all illegal? Truly want to understand.

It's not illegal, but you have to do all the paperwork the same as if you pay in USD. That means tax withholdings and all that, on a per-pay-period basis. Doing this basically means going through a payroll provider. When I had an employee we paid in BTC, we had to go through a licensed company to actually do the BTC payment to our overseas worker (Circle).

The way it worked was our payroll provider would release the paycheck in USD to Circle, who would do conversion to BTC at prevailing exchange rates same day before executing the transfer.

If we already had the money in BTC, we would have had to convert the money to USD to send to our payroll provider so they could do withholdings and all that, and then have Circle convert it back to make the transfer.

There are foreign transfer reporting requirements and rules about currency conversion at payment time so that you can't skirt paying taxes. If you try to do it yourself you're making a lot of extra work for yourself.

> Startups can't legally pay their employees in crypto

...

> It's not illegal

Why did you write that it was?

> you have to do all the paperwork the same as if you pay in USD

Yes. Obviously.

> Why did you write that it was?

You misread. You can't legally pay through transfers (between wallets). You need an intermediary that verifies identity linked to wallets and does escrow to satisfy anti-fraud requirements.

It's probably legal as long as you do all the same accounting/withholding that you would normally do. I suspect some companies are forgetting to do that, just as many people forget to report taxes on crypto.

Is it really illegal for US companies to pay their employees in cash or cheques?

It's not illegal to pay W-2 employees in US currency as long as you satisfy IRS withholding and reporting requirements. Paying employees in non-currency assets (gold, crypto, etc.) is highly regulated since it's often used as a tax-evasion scheme.

- ACH fees are pretty small, depends on the payroll provider of course, so USD ACH transfer to Wise is pretty much free

- I bet with whatever way I can convert the stable coin to my local currency (EUR), that it will be more expensive than Wise. Certainly Paypal is really expensive (as in SWIFT transfer would be better)

actually its competitiev to wise. USDC/EUR rates are pretty good and are only gonna get better.

After ACH, which I’m assuming you got for free as you mentioned, US to Poland for 1000 USD on Wise is still 0.46% which is multiple orders of magnitude more expensive.

More expensive then what? The magic that converts USDC into Zloty?

> You can easily put stablecoins in a Lulo savings account and get 5% interest instead of 0.1% or whatever your bank provides. Yes Lulo has insurance.

From Lulo's site[1]: "Lulo’s yield comes from interest paid by traders and borrowers in integrated DeFi protocols. These loans are over-collateralized with assets like SOL, ETH, and BTC, reducing lender risk."

SOL, ETH and BTC as collateral? What if their value goes down? We know what happened when the banks made bad housing loans (2008 sub-prime mortgage crisis). At least the houses had some tangible value - bricks and mortars. Crypto seems like a fiat currency minus the "full faith and credit of the United States government".

> 1234.56 in PyUSD means you get 1234.56 in Chase or Wells Fargo or whatever. In future your bank will hold these assets directly without need to off-ramp at all.

If the appeal of PyUSD is that you can convert it into equivalent USD anytime, why do we need PyUSD at all? What's the value-add, apart from low transfer fees?

[1] https://lulo.fi

> SOL, ETH and BTC as collateral? What if their value goes down?

The lender provides the collateral. If when the value goes down, Lulo does a partial liquidation.

> What's the value-add, apart from low transfer fees?

High interest, with insurance. Mentioned in the comment you're replying to.

I don't know why I'd trust crypto companies with my company's money given the general lack of regulation; outrageous history of massive fraud, scams, security breaches and simply insiders running away with money; short history of these companies; lack of trusted deposit insurance; lack of reversibility; suspicious claims of guaranteed high "risk free" rates of return; and frankly, the general seediness of seemingly everyone involved.

I mean, for goodness sake, "normie"? Come on.

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