The Dubai Court of First Instance has officially recognized the payment of salaries in cryptocurrency under employment contracts in a landmark ruling. The ruling marks a significant shift in the UAE’s approach to digital currencies, signaling a broader acceptance of cryptocurrencies in the region’s legal and economic framework.
The landmark ruling reflects the UAE’s changing legal landscape.
The case, identified as No. 1739 of 2024, involved an employee who sued her employer for unpaid wages, wrongful termination compensation, and other benefits. The employment contract partially stated a monthly salary in legal currency and $5,250. EcoWatt Tokens, a form of cryptocurrency. The dispute arose when the employer failed to pay the token portion of salary for six consecutive months.
Irina Heber, partner at UAE law firm NeosLegal, emphasized that this ruling differs significantly from the court’s position in 2023, when a similar case was dismissed because the employee could not provide a clear method for evaluating cryptocurrencies in fiat currency. However, in 2024, the court ruled in favor of the employee, ordering the employer to pay the cryptocurrency salary as stipulated in the contract without converting it into fiat currency.
Court Recognizes Cryptocurrencies in Employment Contracts
Heaver stressed that the decision underscores the UAE’s progressive approach to digital currencies and reflects a growing willingness to integrate cryptocurrencies into everyday financial transactions. The court’s ruling acknowledges the evolving nature of the Web3 financial system and represents a step toward greater acceptance of cryptocurrencies within the UAE’s legal framework.
The court’s reliance on the UAE Civil Transactions Law and Federal Decree No. 33 of 2021 in its ruling demonstrates the consistency of legal principles even as new financial technologies emerge. Not only does this ruling strengthen the legal validity of cryptocurrency payments, it also sends a signal to both employers and employees that these terms in their employment contracts will stand up to the courts.
What it means for the UAE to adopt cryptocurrencies
The implications of this ruling are far-reaching. It sets a positive precedent that could encourage more companies in the UAE to consider incorporating digital currencies into their financial practices. For employees, this ruling is a significant victory, ensuring that their rights to agreed compensation, whether in fiat currency or cryptocurrency, are protected under UAE law.
Heaver noted that the ruling is an important step in the UAE’s journey to becoming a leader in the digital economy. It sends a clear message that the country is open to innovative financial practices and is prepared to adapt its legal framework as cryptocurrencies play a growing role in global finance.