As part of increasing adaption of cryptocurrency in the Persian Gulf region, the Court of First Instance in Dubai has accepted it as a lawful method of salary remuneration . Given that this is a new form of payment and part of the Web3 economy, this is a new authoritative approach of the UAE jurisprudence concerning crypto within employment contracts.
Progressive Legal Shift in Cryptocurrency Use
The recent decision has been marked as the number 1739 of 2024 by UAE lawyer Irina Heaver, a partner at NeosLegal. She mentioned that it remains a positive feature pointing to a ‘progressive approach’ of the Dubai judiciary to contrast with the previous position of this Dubai in 2023 when the same case was dismissed due to the absence of a method that could be used to ascertain the value of crypto in fiat money.
The latest one was based on a current employee who had his contract providing for a monthly remuneration in fiat money and 5,250 EcoWatt tokens. When the employer denied to pay the token part of the salaries for six months, the employee sued the employer for unlawful dismissal. In the previous 2023 ruling the court admitted tokens into the calculation but freed the defendant from payment on the grounds that it could not discern a method for determining the prevailing market value. This can be said to have reflected a traditional approach of analyzing things as it demanded proofs where issues to do with unconventional payment forms were in question.
Court’s Recognition of Digital Currency in Employment Contracts
Nevertheless, in the year 2024, the court made a progressive leap and held that the employee was entitled to receive the wage to be paid in crypto as agreed by the parties in the contract of employment and need not be converted into fiat first. Heaver talked about this as a revolution in the legal understanding of the use of digital currency in relation to employment rights as well as the support for Bitcoin and other similar currencies in the UAE.
These included the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021 in order to avoid inconsistencies in the laws being applied to wages. According to Heaver, this judgment is beneficial and open the door for the expansion of the utilization of crypto in regular financial enterprises and complements Dubai’s goal of becoming the leading digital economy center.
The decision is beneficial to employees and is a turning point of the digital wave in the United Arab Emirates. As Heaver said, “This ruling holds the triumphant position that if an employment contract has such terms, then both the company and the employee have to obey them, whether wages are actual or cryptocurrencies. ”
