Wages in cryptocurrency: what works, what doesn’t?

Cryptocurrencies are becoming increasingly relevant in everyday life. They offer many advantages, but also disadvantages such as significant price fluctuations. But are cryptocurrencies suitable for paying wages, or are employers bound to conventional currencies? The Federal Labour Court (BAG) recently addressed this question.

Advantages and disadvantages of cryptocurrencies

Cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Ripple (XRP), Cardano (ADA), etc. are becoming increasingly popular.

And with good reason, because cryptocurrencies offer the potential for massive price increases and thus open up enormous opportunities for returns. But where there is light, there is also shadow: in addition to the chance of making significant profits in a very short time, the exact opposite can also happen. This is because cryptocurrencies are subject to strong price fluctuations – high losses cannot therefore be ruled out.

This risk in particular raises questions about whether cryptocurrencies are suitable for paying wages, rather than using the intended currency, such as the euro.

For this reason, the Federal Labour Court (BAG) recently addressed this issue and initially published a press release on its decision (BAG, ruling of 16 April 2025, ref.: 10 AZR 80/24).

What was the case about?

According to her employment contract, an employee of a company active in the cryptocurrency sector was to receive a sales-based commission payment by 31 March 2020, in addition to her regular salary. It was agreed that the commission entitlement for the previous month would be calculated in euros and then converted into ETH at the current exchange rate on the due date and ‘paid out’ in ETH.

However, this did not happen by the end of the employment relationship at the end of December 2021, even after repeated requests by the employee to pay her the commission in the form of ETH. It was only when the salary for December 2021 was paid that the employer also paid the commission, but in euros rather than in ETH as agreed.

The employee did not agree with this. She sued for the transfer of 19.194 ETH for February and March 2020, taking into account commission payments already made in euros. The employer, on the other hand, considered the commission claims to have been fully settled by its payment in euros in December 2021.

BAG: Cryptocurrency is not money, but acceptable as payment in kind

Basically, the woman was right.

Like other cryptocurrencies, ETH is not money, but merely a digital representation of value, cf. Section 1 (11) sentence 4 of the German Banking Act (KWG). Cryptocurrencies are therefore not electronic money and are not legally recognised means of payment.

At the same time, the BAG concludes that this fact means that certain (proportional) parts of remuneration for work can be ‘paid out’ in cryptocurrencies – as benefits in kind pursuant to Section 107 (2) sentence 1 of the Trade Regulation Act (GewO).

However, this is subject to the condition that it is in the employee’s interest. The Federal Labour Court assumed this to be the case in this instance, as cryptocurrencies offer opportunities for profit comparable to those offered by stock options.

Observe the seizure exemption limit

Employers are therefore permitted to pay employees with cryptocurrencies – in principle, at least.

According to Section 107(2) sentence 5 GewO, payments in kind may not exceed the attachable portion of the remuneration. The non-attachable portion of the wage must therefore be paid to employees in euros (Section 107 (1) GewO). However, such a split of the remuneration can be difficult in practice, as the attachment exemption limits for a person can change. However, as long as the seizure exemption limit is observed, the wage can, conversely, be paid in ETH, BTC, USTC, etc. – the BAG has now clarified this. Especially in the case of commission claims in addition to the actual salary, payment in cryptocurrencies therefore appears unproblematic.

Establish clear rules and seize opportunities

This ruling opens up the possibility for employers to develop new remuneration models and thus become more attractive to certain (potential) employees.

However, if employers wish to allow such models in individual cases within their companies, clear rules must be defined in order to adequately protect all parties involved.