Dubai Court of First Instance affirms crypto as a validity salary payment method

• Dubai Court validates salary payments in cryptocurrency, shifting from prior stance.
• The employee’s contract in the case in question included both fiat and EcoWatt tokens as payment.
• The ruling sets a precedent for digital currency adoption in UAE’s financial transactions.

In a landmark ruling, the Dubai Court of First Instance has affirmed the validity of salary payments in cryptocurrency under employment contracts.

This ruling marks a significant shift from the court’s previous stance, highlighting a growing acceptance of digital currencies in the UAE’s legal and economic frameworks.

Employee sought payment in EcoWatt tokens

The case in question, identified as case number 1739 of 2024, involved an employee who had filed a lawsuit claiming that their employer had failed to pay both their regular wages and additional benefits that included cryptocurrencies.

The employment contract in dispute specified a monthly salary in fiat currency along with 5,250 EcoWatt tokens. The contention arose from the employer’s inability to pay the crypto portion of the salary for six months.

In 2023, the court had initially acknowledged the inclusion of EcoWatt tokens in the contract but did not enforce payment in cryptocurrency due to the lack of a clear method for valuing the tokens in fiat terms. This decision reflected a more traditional viewpoint, emphasizing the need for concrete evidence when dealing with unconventional payment forms.

However, today’s ruling represents a progressive shift. The court has now ordered the payment of the salary in EcoWatt tokens as per the employment contract, without requiring conversion to fiat currency.

Irina Heaver, a partner at UAE law firm NeosLegal, praised the decision as a step forward in integrating digital currencies into legal frameworks. Heaver noted that the court’s reliance on the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021 in both judgments shows a consistent application of legal principles in wage determination.

Heaver emphasized that the ruling sets a positive precedent for the adoption of digital currencies in financial transactions. She stated, “This decision reflects a broader acceptance of cryptocurrency in employment contracts and highlights the court’s recognition of the evolving nature of financial transactions within the Web3 economy.”

This court ruling not only supports employees’ rights to their agreed-upon wages but also signals a significant move towards establishing the UAE as a leader in the digital economy.