Dubai’s Court of First Instance has made a groundbreaking decision by recognizing cryptocurrency as a legitimate form of salary payment, signaling a major shift in the United Arab Emirates’ stance on digital currencies. This ruling represents a significant departure from the court’s previous position in 2023, where a similar case was dismissed due to difficulties in valuing crypto payments.
A Progressive Shift Toward Digital Currency Integration
Irina Heaver, a partner at NeosLegal, emphasized that this new ruling in case number 1739 of 2024 illustrates a progressive movement toward integrating digital currencies into the UAE’s legal system. The case centered around an employee whose contract stipulated that part of their salary would be paid in EcoWatt tokens. A dispute arose when the employer neglected to pay the token portion for six months.
In the past, while the court had acknowledged the existence of EcoWatt tokens in contracts, it did not enforce the payment due to the absence of a clear method for converting these tokens into fiat currency. Heaver pointed out that the 2024 decision marks a significant change, as the court now supports the payment of the cryptocurrency portion without mandating its conversion to traditional currency.
Broader Acceptance of Cryptocurrency in Employment Contracts
“This ruling shows a broader acceptance of cryptocurrency in employment contracts,” Heaver remarked. “It reflects the evolving nature of financial transactions in the Web3 economy.”
She also highlighted that the decision is firmly grounded in the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021, showcasing the court’s consistent application of legal principles in response to the changing financial landscape.
This landmark ruling sets a positive precedent, likely encouraging more businesses to explore the use of digital currencies for transactions. It also fosters a more innovative economic environment in the UAE, further solidifying the nation’s position as a forward-thinking hub in the global economy.
