- A Dubai court reversed its previous stance and confirmed the payment of wages in cryptocurrency.
- The employee’s contract in this case includes fiat currency and EcoWatt tokens as payment.
- The ruling sets a precedent for the adoption of digital currencies in financial transactions in the UAE.
In a landmark ruling, the Dubai Court of First Instance confirmed the validity of salary payments in cryptocurrency in employment contracts.
The ruling marks a significant shift from the court’s previous stance and highlights the growing acceptance of digital currencies in the UAE’s legal and economic framework.
Legal Recognition of Cryptocurrency Payments in Dubai
In a noteworthy decision, the Dubai Court of First Instance has recognized the use of cryptocurrency for salary payments in employment agreements.
This ruling signifies a major departure from the court’s earlier position and illustrates the increasing integration of digital currencies within the legal and financial landscape of the UAE.
Employee Dispute Involving EcoWatt Tokens
The case, identified as No. 1739 of 2024, centers around an employee who took legal action against their employer for failing to provide regular wages and associated benefits, including cryptocurrency payments.
Under the terms of the employment contract, the employee was entitled to a monthly salary in traditional currency along with 5,250 EcoWatt tokens. The dispute arose when the employer encountered difficulties in fulfilling the cryptocurrency portion of the wage for a period of six months.
In 2023, the court initially acknowledged the inclusion of EcoWatt tokens in the contract but refrained from requiring cryptocurrency payments due to the absence of a clear valuation method for the tokens in fiat currency. This decision reflected a conventional approach emphasizing the necessity of concrete evidence when dealing with non-traditional payment forms.
Landmark Court Ruling
However, the recent ruling indicates a shift in perspective. The court has now mandated wage payments in EcoWatt tokens under employment agreements without the need for conversion to traditional currency.
Irina Heaver, a partner at Emirati law firm NeosLegal, praised the decision as a significant step towards integrating digital currencies into the legal framework. She highlighted the court’s reference to the UAE Civil Transactions Law and Federal Decree No. 33 of 2021 in its judgments, indicating a consistent application of legal principles in wage disputes.
Heaver emphasized that this ruling establishes a positive precedent for the adoption of digital currencies in financial transactions, showcasing the court’s acknowledgment of the evolving nature of financial exchanges in the Web3 economy.
This court ruling not only upholds the rights of employees to receive agreed-upon wages but also positions the UAE as a frontrunner in the digital economy.