Dubai Court Rules Crypto Can Be Used for Salaries

In a significant development, the Dubai Court of First Instance has recognized cryptocurrencies as a valid form of payment for salaries under employment contracts. 

How Did it Happen? 

The decision, reached in a case between two parties this year, marked a notable shift from a previous verdict reached by the same court in 2023. In last year’s case, the court ruled against crypto salary payments due to the plaintiff’s failure to disclose the exact valuation of the crypto asset involved in the case. 

The first case emerged in 2023, when a plaintiff (employee) filed a lawsuit against the defendant (employer), alleging unpaid remunerations, including a portion of their salary denominated in EcoWatt tokens. 

While the court recognized the inclusion of the tokens in the employment contract at the time, it did not award the amount in EcoWatt tokens due to the employee’s failure to provide a clear method of calculating the fiat equivalent value of the tokens. 

Salary Payments in Crypto 

Fast forward to 2024, another similar case emerged, when the plaintiff alleged unpaid salaries in fiat and around 5,250 EcoWatt tokens for six months. 

This time, the court ruled in favor of the employee, recognizing cryptocurrencies as a valid form of payment for salaries under employment contracts. The court ordered the employer to pay the remuneration in EcoWatt tokens rather than convert it into fiat. The court based its verdict on the principle that “wages are a right of the employee for the work agreed upon.”

The court said:

Regarding the request for the monthly salary, it is established according to Article 912 of the Civil Transactions Law that wages are a right of the worker against the employer. The employer must pay wages on due dates, and if not, the court shall determine it. As the respondent did not provide evidence of payment in EcoWatt tokens, the court orders the respondent to pay the claimant the value of her wages in EcoWatt tokens.

The landmark ruling is expected to have a far-reaching impact on the UAE’s cryptocurrency sector and foster wider adoption of digital assets within the country. Moreover, it indicates a growing acceptance of crypto as a legitimate form of payment.