Suppose that an overseas customer tells a contractor that she or he cannot pay for the job via common overseas payment options — such as an online payment, money order, payment card, bank transfer — but can pay via some cryptocurrency.

Assuming that the contractor got a (principally irreversible) cryptocurrency payment, can a contractor convert a cryptocurrency payment into money?

I deliberately avoid to specify a specific type of cryptocurrency because I generally don't know the different types.

By "contractor" I meant to a personal service seller but an answerer might want to explain about an organization as well.

  • 1
    After understanding more, this may be better suited for this SE - crypto.stackexchange.com. It seems more that you want to know how much hassle it would be for you to accept cryptocurrency as a payment method for your services. The answer is, pretty easy once you have it set up, might take a day and some fees to set up though. Like I mentioned before, be sure to require any costs associated with exchanging for your desired currency in your invoice, as a separate line item - and make those terms clear with the customer before invoicing, when they request to use a crypto payment
    – TCooper
    Aug 5, 2020 at 17:01
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    @TCooper Please explain to me what this question has to do with cryptography. Aug 5, 2020 at 17:07
  • @RodrigodeAzevedo well "crypto"currencies are all based on cryptography, though I admit I only googled the SE and mistook it for a cryptocurrency only SE due to the top result - I believe there is such an SE? That's the one I intended to link to.
    – TCooper
    Aug 5, 2020 at 17:28
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    I voted to close this question because the question is highly dependent on WHICH cryptocurrency is referred to. For example, any cryptocurrency that is listed on Coinbase (a public, NYSE-listed company) can be converted to fiat, e.g. $US for a small fee measurable in basis points and deposited safely in the recipient's US bank account. Every deposit will be an IRS taxable event, like the sale of a security however. This question has been asked on bitcoin.stackexchange.com and should have been transferred there as @RodrigodeAzevedo originally suggested. Jun 7, 2021 at 16:50
  • Comments have been moved to chat; please do not continue the discussion here. Before posting a comment below this one, please review the purposes of comments. Comments that do not request clarification or suggest improvements usually belong as an answer, on Personal Finance & Money Meta, or in Personal Finance & Money Chat. Comments continuing discussion may be removed. Feb 4 at 17:04

5 Answers 5


The short answer to your question is yes.

You "exchange" cryptocurrencies for fiat like the US dollar, British Pound, or the Euro the same way you would convert your sofa into fiat; You would trade it. You find someone who wants to trade their fiat (money) for your crypto, and you do the trade. There are online exchanges that can help you do this, or you can find someone in person.

Cryptocurrencies are just "points". The specific characteristics of these points make them desirable to some people, which creates demand, which is what gives them value. What these characteristics are (decentralization for example) and why someone would want them, are outside the scope of this discussion. But they are very real.

Cryptocurrencies themselves are not scams. They are often used by scammers due to some characteristics they have, but they are not scams themselves. However, because anyone can create their own cryptocurrency, you have to be careful that the cryptocurrency in question is actually valuable (tradable). Unless you're receiving a well-known currency that has a high trade volume and has been around for years (such as Bitcoin), it's very easy for someone to give you untradable useless crypto. For instance, there is a crypto currency known as Bitcoin Cash which sounds an awful lot like Bitcoin, but it's actually a scam and can be taken from you at any moment by the people who control the crypto. Because this is all unregulated, you have to do the homework and double check everything yourself.

Why someone would say they cannot use any other payment method is completely unknown. It sounds suspicious, but there are innocent explanations. One of which being that they simply don't want to use anything else. Or that they're blacklisted for various reasons. Or they're trying to protect their identity. Or they're going to pull some quick bait and switch and try to scam you. Who knows.

There is lots to say about cryptocurrencies. Well known crypto that has been around for years are not scams. But only if you use them right. Slight oversights can lead to thousands if not millions in losses. Doing tons of homework on your own is the price you pay for using the technology.

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    Trading fiat currencies is a lot easier because every major bank will do it.
    – user253751
    Aug 5, 2020 at 20:49
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    Why do you say Bitcoin Cash is a scam? It's a fork of Bitcoin and is absolutely tradable.
    – Daniel
    Aug 6, 2020 at 0:29
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    Some cryptocurrencies are outright scams, but others aren't. Aug 6, 2020 at 1:02

Yes, there are ways to convert cryptocurrency to various real [believe me, I very specifically chose that word] currencies. If someone claims they can't they are probably setting up fraud of some type.

The 'smell test' that fails here is that demanding very specific payment techniques, to the exclusion of all others, is often step 1 in committing some sort of online service fraud. This is true whether it is demanding a specific type of Western Union payment, or some random cryptocurrency.

The reality of why this is the case, is that payment to the other person is typically demanded in a way that is non-refundable. If you use paypal, you might be able to dispute the charge if the seller doesn't follow through on their end of the transaction, but cryptocurrency is unrecoverable [this is one of its flaws, often touted as one of its benefits].

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    [believe me, I very specifically chose that word] "real" or "currencies"? Thanks,
    – George
    Aug 4, 2020 at 13:44
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    @user17915 That's the only way to convert any type of currency into a different kind of currency.
    – nick012000
    Aug 5, 2020 at 9:19
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    @nick012000 The key word that's different is 'investment'. People don't buy real currencies as 'investments' [even short term profit-driven currency trading is typically short term, and either done by a trader making likely < 1 week holds, or else for specific motives like hedges], they use currencies to buy things. Aug 5, 2020 at 12:56
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    You said "real" but it would be more accurate to say "fiat". After all, cryptocurrencies are also real, and so the word offers nothing useful in this context. Aug 5, 2020 at 14:38
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    @MichaelHampton Actually I think my thoughts on the subject are quite accurately conveyed by my choice of descriptor. Aug 5, 2020 at 16:02
  1. "customer tells contractor that she or he can't pay for the job via common overseas payment options..."

FYI. This is, simply, an outright lie.

It would be like saying "I can not purchase a cup of coffee" or "I am unable to find a Road" or "There's a strange problem and the sun didn't rise today."

Completely silly.

(It could be they want to pay with bitcoin, since (say) they have some on hand, but if they say they "can't" pay normally, it's simply a lie.)

  1. It is trivial to convert bitcoin to ordinary money, sure. This happens in the billions each day.

Here's a trivial example -

enter image description here

coinbase.com, costs a few dollars to send USD, GBP or EUR.

  1. Note that in this situation, very simply the >> customer << would simply click one button to send normal USD to the contractor.

There is utterly no reason for the customer, to send bitcoin, and expect the contractor to make the effort to exchange it to dollars.

The >> customer << would simply click one button to send normal USD to the contractor.

(Sure, the customer may say "Oh, I can't be bothered doing that, I will give you 20% extra on top so you can do it." But normally the customer would click one button to exchange bitcoin to USD and send a normal transfer.)

This is simply a scam.

Note that this is almost certainly some sort of scam or scammy edge case.

Anyone who "has bitcoin" knows you can click a button, exchange it to USD, and send a normal dollar transfer to say a contractor or other payment.

This happens in the billions every day and it's as easy as buying panties at WalMart. It's a non-issue, trivial.

The fact that they're saying they "can't" do this instantly flags it as some sort of scam or soft scammy edge case.

Do note that if you accept bitcoin in payment, you MUST tell the IRS about the transaction, there is a special form.

  • Note: there are some people who think cryptocurrency will take over the world and want to use it, but those people would probably also be willing to send normal currency if you can't accept cryptocurrency.
    – user253751
    Aug 4, 2020 at 15:46
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    "Note that fees are HIGH." They're typically around 20-55 basis points. That's less than many other conventional payment mechanisms. See, for example, Coinbase Pro's fee table which maxes out at one half of one percent. Aug 4, 2020 at 22:40
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    There are a couple of cases (albeit unusual ones) I can think of where someone with crypto would be unable to pay with fiat. Most banks are wary of dealing with companies who deal in crypto, so many crypto companies have difficulty getting a bank account (most UK based crypto companies seem to use eastern european banks I've never heard of, for example) which makes sending fiat difficult - a red flag, but not necessarily a scam. And of course there's straight up criminal enterprises like darknet markets, which the OP should probably avoid, but that are probably not going to pay in fiat.
    – James_pic
    Aug 5, 2020 at 14:56
  • @DavidSchwartz you're right, fees are actually not that high now. (you're looking at the "trading" fee. the fee to send conventional money is like 20 bucks.)
    – Fattie
    Aug 5, 2020 at 16:46
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    @Fattie You are being very aggressive. Yes, I am a US taxpayer. Please don't insult my intelligence. You just referenced a seemingly very critical form, it would be helpful for readers to at least name it or provide a link. That's kind of the point of the StackExchange, to be helpful. Aug 6, 2020 at 14:08

Since cryptocurrency can be transferred, it can be exchanged for money. However, some entities in possession of cryptocurrency may prefer not to exchange it for money. Why? Perhaps to avoid an audit. Or, perhaps to avoid prison.

Two possible stories:

  1. Suppose that the customer in question acquired Bitcoin a decade ago, when its price was, say, approximately 0.1% of today's price. Suppose further that this acquisition was informal, over-the-counter (OTC) and left little that could constitute an audit trail. Assuming that the customer is happy to pay capital gains taxes, scrutiny of the acquisition might lead to uncomfortable, embarrassing questions. Why was the transaction informal? Where is the contract? Where is the invoice? Was the customer engaged in criminal activity a decade ago? Bribery? Drug trafficking? Money laundering? Terrorism financing? Paying a foreign contractor may allow the customer to evade such scrutiny. Or, at least, to be subjected to less meticulous scrutiny.

  2. Suppose that the customer in question is engaged in cyber-crime, say, ransomware. After having held individuals, firms, hospitals and even governments hostage, the customer may possess "dirty" cryptocurrency. Were the customer to attempt to exchange such "dirty" assets for money at a cryptocurrency exchange, he would have to deal with KYC and AML. If the customer attempted to exchange "dirty" cryptocurrency for (physical) cash, he might need to hire armed security. And who would protect him from his own armed guards? Paying a foreign contractor may be attractive because in that case the KYC / AML requirements might be much more relaxed — perhaps even non-existent. Are foreign contractors more skilled than compliance officers at determining whether the documents provided by the customer are fraudulent?

These are only two possibilities. There must be more. Can you think of any?



You've gotten several answers on whether it can be exchanged, but I think one related to the tax implications of accepting cryptocurrency is perhaps valuable.

In general, accepting cryptocurrency will be effectively identical to receiving cash from a tax perspective, with the caveat that you will have to define the cash value of the cryptocurrency. Exactly how you do that depends on jurisdiction, but for the most part, the easiest way is to simply exchange the cryptocurrency for cash as soon as you receive it, using one of the larger cryptocurrency exchanges (assuming the specific currency you receive is a "major" currency, such as Bitcoin or Ethereum, and is traded in large exchanges). If you do that, then you will immediately establish its market value - by selling it at market value - and can simply ignore the back and forth of the cryptocurrency. Report that value on your taxes as you'd have reported cash. Record the transaction fee - depending on your jurisdiction, this may be reduce your tax burden.

If you do not immediately exchange it, you should at least record what you could have exchanged it for. That will establish the value you received from the client. Any change after that in value - positive or negative - will be more like an investment in the stock market; it will become a capital gain or loss, most likely. Again, check your jurisdiction to make sure this is the case, but it's the common way to treat any exchange of services for goods which then change in value over time.

  • If you do work as a contractor, the tax office will want to know how much you received, and that amount is found when you convert to currency. I’m in the Uk. Whether I get paid in pound, dollars or bitcoin, my income is the number of pounds going into my bank account. If I get bitcoin supposedly worth £10,000 and a year later I convert it to £5,000 or £10,000 or £20,000 depending on my luck, my income is exactly those 5, 10 or 20 thousand pounds.
    – gnasher729
    Feb 4 at 11:53

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