Merchants tend to give their customers a variety of payment options such as cash, credit card, or a payment app like PayPal, Google Pay, or Samsung Pay.  Cryptocurrency payments are an additional transaction option that is becoming increasingly popular. These crypto payments can be denominated in bitcoin (BTC), ether (ETH), bitcoin cash (BCH), stablecoins, or any number of other cryptos. For businesses, this increased adoption has created an incentive for them to receive — and send — crypto payments.

Crypto payment acceptance could grow their business by giving prospective customers a payment option that their competitors don’t offer. Further, crypto may be the preferred payment method for a business’ vendors or their employees. Conversely, the downside of crypto payments is that it could complicate your payment systems, your accounting methods, and your tax liabilities. Let’s look into the pros and cons of incorporating crypto payments into a business — be it a restaurant, car dealership, or an online retailer.

Accepting Crypto Payments as a Business

One of the benefits of accepting crypto payments is not having chargebacks as nearly all crypto transactions are irreversible. Once you have received a confirmed payment, you don’t have to worry about a reversed transaction like you would from some other payment methods. You’ve received payment so you can send your product or deliver your service without this concern. This is particularly useful when accepting or sending international payments.


There are typically two ways that businesses handle the receipt of cryptocurrencies (especially the more volatile ones): immediately convert the crypto into U.S. dollars (USD) or keep all — or some — of the payment in the crypto they received for some duration following receipt. To immediately convert their crypto into USD, a company can use crypto payment solutions such as Wyre, Anypay, or BitPay. Many of these companies let you settle payments in fiat currency (USD), crypto, or a combination of both. If you simply convert all your incoming crypto into USD immediately, there really aren’t any additional tax complications. Many of these crypto payment platforms can function as intermediaries that convert the crypto to USD prior to you even receiving the initial payment.

One of the benefits of accepting crypto payments is not having chargebacks as nearly all crypto transactions are irreversible

Other businesses tend to keep these payments in crypto for a few different reasons. If a business is only receiving 1-3% of their payments in crypto and they don’t immediately need the funds, they may hold onto cryptos that they believe have short- or long-term potential to appreciate in value. Other businesses may choose to keep a portion of their crypto payments as crypto while converting the rest to USD immediately. 

Any crypto in a business’ treasury that appreciates will benefit their bottom line. However, this crypto appreciation will be taxed for short- or long-term capital gains once it is sold, traded for another crypto, or used to make a payment. This can complicate the tax and accounting sides of a business and may be one reason why companies are reluctant to introduce a crypto payment option. Others see the upside of their capital appreciating as outweighing any of these other issues.

Many local and state governments within the U.S. allow you to pay crypto taxes with crypto.

For example, Elon Musk experimented with accepting BTC payments for Tesla cars and also accepts dogecoin (DOGE) for certain Tesla and SpaceX products. During the period that Tesla accepted BTC, they chose to hold onto it in lieu of selling it immediately. Other businesses that accept crypto include Google, the Dallas Mavericks, and the luxury brands Balenciaga and Gucci. For any business people who are reluctant to adapt to this changing paradigm, you may want to reconsider your position. A recent survey of retail executives shows that the vast majority believe crypto payments will become ubiquitous within five years.

Sending and Using Crypto as a Business

While inbound crypto transactions are increasingly becoming part of regular business operations, the outbound crypto transaction market is also gaining in popularity. As nearly every business also works with other businesses (and not just consumers), you may have the option or incentivization to pay vendors with crypto as well. They may use the same services mentioned above to receive crypto payments. This could be an additional reason to not convert received crypto: you could then use it to pay for your business needs and expenses. 


Another reason to accept crypto—or buy it—is to pay your current employees. It is becoming increasingly popular to pay salaries partially or completely in cryptocurrency. While some salaries are simply denominated in crypto (think 0.5 BTC per quarter), most crypto salaries are denominated in a USD amount that is then converted to a crypto equivalent. For example, the salary contract language could be something like “$3,000 worth of BCH paid every other Friday with the fiat-to-crypto conversion done at 12 p.m. EST, using the current market price” in order to transparently explain the conversion process. 

While there could be a large upside to a purely crypto-based salary that does not peg itself in any way to USD, this could also end up being bad for either the employee or employer. Using our example above of an annual 2 BTC salary, you could have a wide degree of fluctuation in your purchasing power. With a BTC spot price of $20,000, that’d be equivalent to a $40,000 salary. If BTC increases to $100,000 (like many have forecast), that’d equate to a $200,000 salary. For this reason, most would recommend that those that want to ameliorate their risk should have their crypto salary tied to USD.

Paying Crypto Taxes as a Business

In general, the primary tax consideration for businesses when it comes to crypto is paying the short- and long-term capital gains on crypto that has changed in value since they initially held it (either via receiving it or buying it) and has incurred a taxable event (sale, trade, purchase). For crypto that has gone down in value, a company can take an impairment charge. Tesla did this in 2022 after its BTC holdings dropped in value.

In order to pay taxes, a crypto option is currently not on the table. The IRS expects payment in USD. However, many local and state governments within the U.S. allow you to pay crypto taxes — with crypto. The acceptance of crypto for tax obligations seems to be increasing for non-Federal jurisdictions. Most think the acceptance of crypto for federal taxes is unlikely to be enacted within the next few years — if ever. 

No longer the purview of only crypto-centric companies, the three-way venn diagram of crypto, taxes, and business is expected to increasingly show overlapping areas as crypto adoption in all forms trends upwards.

Cheat Sheet:

  • Surveys show U.S. retail executives expect crypto payments to become commonplace prior to 2030.
  • Companies that accept crypto as a form of payment can immediately convert it to USD, convert a percentage to USD, or keep the payment in its original crypto denomination.
  • Companies — like individuals with crypto — will owe capital gains taxes on crypto that has appreciated in value during the duration that they held crypto on their balance sheet.
  • Crypto taxes for the IRS can’t be paid with crypto. The IRS expects payment in USD.

Disclaimer: This crypto tax series is merely for informational purposes and should not be considered legal or tax advice. Please solicit the services of a crypto knowledgeable certified public accountant, tax professional, or lawyer should you need further guidance.

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