The Dubai Court of First Instance has made a landmark decision by recognizing cryptocurrency as a legitimate form of salary payment under employment contracts, marking a significant step in the legal acknowledgement of digital assets.
Precedent-Setting Court Decision
The Dubai Court of First Instance has set a precedent by acknowledging cryptocurrency as a valid form of salary payment in employment contracts. In a case where an employee accused their employer of not paying more than 5,000 EcoWatt (EWT) tokens, the court ruled in favor of the employee, affirming that crypto payments are legitimate and part of the agreement.
Employers and Crypto Payments
A year ago, the court denied a similar claim due to the lack of a clear method to determine the fiat value of the tokens. However, this latest judgment reflects a more expansive interpretation of UAE labor laws concerning digital assets. The court emphasized that wages are a fundamental right and that employers must honor contractual terms, including crypto payments, in the absence of proof of payment.
Dubai's Crypto Advancement
Dubai has been among the early adopters of cryptocurrency, starting with the Dubai Blockchain Strategy in 2016. Favorable tax regulations and a booming venture capital scene have attracted crypto projects such as Binance, OKX, and Crypto.com, which have obtained virtual asset service provider licenses. Many of these companies pay their employees in cryptocurrency.
The recognition of cryptocurrency as a legitimate salary payment by the Dubai court sets a new legal precedent. This decision should guide companies that compensate employees with crypto in the UAE.
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