Dubai Court Rules Cryptocurrency As Valid Form Of Salary Payment

In a significant update to the United Arab Emirates‘ judicial approach to cryptocurrency, the Dubai Court of First Instance has ruled that cryptocurrency salary payments are valid under employment contracts. Irina HEAVER, a partner at UAE law firm NeosLegal, explained that the ruling in case number 1739 of 2024 marks a departure from the court’s previous position in 2023, when a similar claim was dismissed because the cryptocurrency involved was not accurately valued.

Heaver believes that this demonstrates a “progressive approach” to integrating digital currencies into the country‘s legal and economic system. Heaver said the case involved an employee who filed a claim alleging that his employer failed to pay him salary, wrongful termination compensation , and other benefits. The employee’s employment contract provided for a monthly salary in fiat money and 5,250 in EcoWatt tokens. The dispute arose over the employer‘s failure to pay a portion of the employee’s salary in tokens for six months.

In 2023, the court upheld the inclusion of EcoWatts tokens in the contract. However, it did not ensure payment in cryptocurrency because the employee did not provide a clear method for valuing the currency in fiat money. Heaver added that the courts reference to the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021 in both decisions demonstrates the consistent application of legal principles in determining wages. According to Heaver, the decision also sets a positive precedent that encourages further integration of digital currencies into everyday financial transactions. The lawyer believes that this contributes to a more inclusive and innovative business environment.