Dubai's judicial system has officially recognized the use of cryptocurrencies as a valid form of payment for salaries.
The landmark decision, issued by the Dubai Court of First Instance, marks a milestone for the development of cryptocurrencies in the city, which seeks to lead the innovation of disruptive technologies.
Recently, the court issued an order recognizing cryptocurrencies as a legal means of payment of wages, a decision that not only reinforces Dubai and the UAE’s stance as a leader in the adoption of crypto assets, but also sets a significant precedent for the future of employment relations in the context of cryptocurrencies.
Dubai sets a paradigm shift in labour legislation
As reported by Lexology, which specializes in analysis and news in the legal field, the decision taken by the Dubai Court of First Instance stems from a case last year in which a former employee sued his former employer for unpaid wages, which included a part in a cryptocurrency called EcoWatt. The media explained that, in that case, the court had taken a cautious approach to cryptocurrency salary payments due to challenges related to volatility, calculation of value in fiat currency and, in general, the lack of clear regulations on the matter.
However, in the recent order, filed in Case No. 1739 of 2024, the court made a 180-degree turn, taking a more progressive stance and embracing cryptocurrencies as a legitimate means of paying labor remuneration. This, Lexology noted, represents a notable shift from the previous ruling in 2023, underscoring the evolving legal interpretation of cryptocurrencies in the city and reflecting a growing acceptance of cryptocurrencies as a legitimate means of remuneration.
According to the ruling, cryptocurrencies are not only valid for the payment of salaries, but employees will also be able to receive crypto assets as remuneration without having to convert them to fiat currency.
The evolution of cryptocurrencies in the UAE judicial sphere
The ruling recently issued by the Dubai Court of First Instance comes in a context where the regulation of cryptocurrencies, in the United Arab Emirates has been in constant evolution.
As mentioned, last year the city court had taken a more cautious and conservative stance, requiring a clear methodology for calculating the value of cryptocurrencies before it could enforce payments that were claimed in these crypto assets. However, the change in the court's decision this month indicates a greater openness towards cryptocurrencies, aligning with the country's overall vision of becoming a global hub for technological and financial innovation.
The court based its ruling on the principle that wages are a worker's right and reaffirmed that employment contracts must be respected in their entirety, provided they do not violate laws or public policies.
In this regard, experts have commented that this decision has set a precedent that could influence future litigation related to cryptocurrency compensation. In addition, it could encourage more companies to consider the inclusion of digital assets in their payment structures and transform the way labor relations are managed in the country.
Dubai and UAE pioneers in crypto regulation
The acceptance of cryptocurrencies as a legitimate form of remuneration in the workplace has significant implications for the UAE’s economy. By officially recognising these digital assets, Dubai is reinforcing its position as a pioneer in integrating crypto assets into the traditional financial system, something that could not only attract more cryptocurrency and blockchain companies to the emirate, but could also foster an innovation ecosystem that benefits the local economy.
Furthermore, experts believe that the recent court decision could have a ripple effect on other sectors, encouraging more industries to explore the use of cryptocurrencies in their business transactions.
All of this could see cryptocurrencies and blockchain technology gain greater global acceptance, while also highlighting Dubai and the UAE’s forward-thinking stance in further modernizing their economies by adapting their legal frameworks to emerging new technologies. As the world moves into a digital age, Dubai’s decision could be the catalyst that prompts other countries to reconsider their own policies on the use of cryptocurrencies in the workplace and other sectors.
