Dubai Court Recognizes Cryptocurrency as Valid Method of Salary Payment

The UAE has seen a significant update to its judicial approach to cryptocurrencies, with the Dubai Court of First Instance recognizing that wages paid in cryptocurrencies are valid under employment contracts. Irina Heaver, a partner at UAE law firm NeosLegal, explained that the ruling in Case No. 1739 of 2024 represents a departure from the court’s earlier position in 2023, when a similar claim was dismissed due to the lack of an accurate valuation of the cryptocurrency involved. Heaver believes this demonstrates a “progressive approach” to integrating digital currencies into the country’s legal and economic framework. The case Heaver recently cited involved an employee who filed a lawsuit against his employer for non-payment of his wages, compensation for illegal dismissal, and other benefits. What was special about the case was that the employee’s employment contract included not only a traditional fiat currency salary, but also a monthly payment of 5,250 EcoWatt tokens as part of his salary. The core of the dispute was that the employer had failed to pay the EcoWatt token portion of his salary as per the contract for six months. In 2023, the court first recognized the validity of the EcoWatt token in this contract, but because the employee failed to provide a clear method to convert the token into fiat currency, the court did not force the employer to pay in cryptocurrency. However, in 2024, the court "took an important step" on this issue. It ruled in favor of the employee, explicitly requiring the employer to pay wages directly in cryptocurrency as agreed in the employment contract without converting it into fiat currency. Heaver said that this ruling not only reflects the court's growing acceptance of cryptocurrencies in employment contracts, but also emphasizes the court's recognition of the transformative nature of financial transactions in the Web3 economy.