On August 15, 2024, the Dubai Court of First Instance officially recognized the payment of salaries in cryptocurrency as a legitimate method in employment contracts. This decision marks a significant milestone in the legal recognition of cryptocurrency in the United Arab Emirates.
According to a report by the law firm Wasel & Wasel, the case originated from a dispute between an employee and a company over unpaid wages, unfair dismissal, and other employment-related rights.
The employment contract stipulated that the employee was to receive a monthly salary in fiat currency and 5,250 crypto tokens. However, the company argued that paying salaries in cryptocurrency lacked a strong legal foundation.
In 2023, the court acknowledged the existence of EcoWatt tokens in the employment contract but did not order payment in cryptocurrency because the employee failed to provide a clear method for converting the tokens into fiat currency.
This time, the court sided with the employee, not only recognizing the validity of payment in cryptocurrency but also ordering the payment to be made in EcoWatt tokens without the need for conversion to fiat currency.
This ruling is based on Article 912 of the UAE Civil Transactions Law and Federal Law No. (33) of 2021, which regulate how wages are determined and paid.
With this official recognition, the court paves the way for broader adoption of digital assets across various sectors, including employment relationships.
Implications for Crypto Adoption in the UAE
Legal experts say this court decision underscores the importance of clarity in contractual agreements and demonstrates the UAE’s readiness to regulate the crypto industry.
Quoted by Cointelegraph, Irina Heaver, a partner at the law firm NeosLegal in the UAE, believes this shows a “progressive approach” to integrating digital currencies into the country’s legal and economic framework.
She also noted that the decision sets a positive precedent, encouraging the integration of digital assets into everyday financial transactions.
“It’s reassuring to see the court recognize that wages, whether paid in fiat or crypto, are an employee’s rightful compensation for the work they’ve performed,” Heaver remarked.
Furthermore, Heaver emphasized that the court’s decision is a crucial step in the UAE’s journey to becoming a digital economy hub.
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