Dubai approves crypto as valid salary payment, marking a new era of digital currencies in the United Arab Emirates (UAE). On August 16, 2024, the Dubai Court of First Instance made an all-important decision, recognizing cryptocurrencies as a legitimate form of salary payment. The ruling not only aligns the UAE with global trends in digital finance but also reflects a new era in how the country views and integrates digital currencies into its legal framework.
Dubai Approves Crypto as Valid Salary Payment; Court Ruling
The case that led to this landmark ruling, case number 1739 of 2024, involved an employee who filed a lawsuit against their employer for unpaid wages, which were stipulated in the employment contract to include both fiat currency and 5,250 EcoWatt tokens. The employee also sought compensation for wrongful termination. Previously, in 2023, a similar case had been dismissed by the court due to the lack of a clear method for valuing the cryptocurrency in fiat terms, reflecting a more conservative stance on digital assets.
However, this recent decision represents a pivotal change. The court ruled in favor of the employee, ordering the employer to pay the agreed-upon salary in EcoWatt tokens without requiring conversion to fiat currency. Irina Heaver, a partner at UAE law firm NeosLegal, explained that this decision shows a “progressive approach” by the courts, moving away from traditional viewpoints that emphasized the need for concrete evidence of value when dealing with unconventional forms of payment.
Implications of Dubai’s Progressive Stance
The court’s reliance on the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021 in reaching this decision demonstrates the consistent application of legal principles in wage determination, regardless of whether the payment is made in fiat or cryptocurrency.
This decision has far-reaching implications, setting a precedent that could influence other jurisdictions within the UAE and beyond. As digital currencies continue to gain traction globally, Dubai’s legal recognition of crypto salaries may encourage adoption of cryptocurrencies in various sectors. By paving the way for digital assets to be used in everyday transactions, Dubai is positioning itself as a leader in the global movement towards accepting digital finance.
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