1. The Case That Set a New Precedent
2. Impact on Employment Relations
3. UAE's Ambitions: A Step in the Right Direction?

Dubai's court has made a groundbreaking decision, ordering a company to pay an employee in cryptocurrency. This ruling sets a new legal standard in the region and has significant implications for Dubai, recognized as a global leader in digital innovation.

The Case That Set a New Precedent

The new decision by Dubai's court in case number 1739 of 2024 reverses a similar case from 2023, where the court denied the claim due to the inability to determine the precise value of the cryptocurrency. In the 2023 case (Judgment No. 6947 of 2023), an employee took their employer to court over wrongful termination and unpaid crypto wages. The court ruled against the employee due to the lack of a clear method to determine the value of the EcoWatt tokens. However, in 2024, the court embraced cryptocurrency as a legitimate form of payment without requiring conversion to traditional currency, ordering the employer to pay 62,867 dirhams and 39,200 EcoWatt tokens.

Impact on Employment Relations

The formalization of cryptocurrency as a legitimate form of salary payment is a game-changer for employers and employees in Dubai. Companies that opt to pay salaries in cryptocurrency now have legal backing, reducing uncertainties. Hala Harb from BSA Ahmad Bin Hezeem & Associates noted that this ruling will simplify crypto salary negotiations, but stressed the need for clear terms and cooperation with authorities to ensure the salaries are properly reflected in the Wage Protection System (WPS). Ankita Dhawan from Métis Institute added that this decision could inspire other industries to offer salaries with virtual assets.

UAE's Ambitions: A Step in the Right Direction?

The UAE has been at the forefront of embracing blockchain technology. Government initiatives like the Emirates Blockchain Strategy and Dubai Blockchain Strategy aim to integrate these technologies across various sectors. Irina Heaver from NeosLegal views the ruling as a crucial milestone in integrating digital currencies into the UAE's economy, fueling innovation and inclusivity. However, Navandeep Matta from Kochhar & Co. noted that this ruling sets a legal precedent only for Dubai and does not automatically extend to other emirates, which could create inconsistencies within the country. Proper regulatory frameworks and clear guidelines will be essential to realizing the full potential of this ruling.

This historic ruling by Dubai's court could have far-reaching implications not just for the region but globally. If successfully implemented, it could encourage the broader acceptance of cryptocurrencies in everyday transactions, with the UAE leading the charge.