Last week, E&UA’s Chief Legal Officer shared an important development in the UAE’s legal landscape, specifically those involving digital currencies and employment law. He explained that the Dubai Court of First Instance made a landmark ruling in 2024 and recognized Cryptocurrency as a legitimate method of salary payment.
Notably, in an earlier decision in 2023, a lower court recognized the inclusion of Ecowatt tokens in an employment contract. Yet, it was dismissed due to issues with the valuation of the digital currency.
Dubai courts confirm employment salary payable in cryptocurrency: Key findings from the 2024 ruling:
The first takeaway is that a Dubai court maintained an employment contract that contained a provision for payment in Ecowatt tokens, a form of cryptocurrency, and ordered the employer to fulfill this obligation.
Furthermore, this decision signals an advanced shift in the UAE judiciary’s approach towards cryptocurrencies, in contrast to the more traditional approach adopted in 2023. As you may be aware, their judgment represents a significant shift from the court’s earlier stance in 2023, where a parallel claim was rejected due to issues with the digital currency’s valuation.
Legal foundations relied on include Article 912 of the UAE Civil Transactions Law and Federal Decree-Law No. (33) of 2021, which emphasizes the legal principles regarding the determination and payment of wages.
Under this new legislation, the UAE will continue to demonstrate its commitment to promoting a progressive legal environment, ensuring we remain at the forefront of global financial innovation.
Recently a legal order has also been passed to use cryptocurrency for salary payments. It is believed that this will improve the image of Dubai as a more fortunate business destination and attract more and more foreign investors. Also, this indicates that the recognition of digital currency as a digital asset is increasing globally.
So, we can say that this change from a 2023 to a 2024 judgment reflects the UAE courts’ willingness to acclimate to changing financial topography. It provides a strong legal framework that appreciates modern financial practices while ensuring the protection of contractual rights.
