The Dubai Court recognized the legality of payment of salaries in cryptocurrency

A court in the United Arab Emirates has ruled that paying wages in cryptocurrency is legal. This decision was made as part of a case in which an employee of one of the local companies accused the employer of non-payment of part of the salary in the form of EcoWatt cryptocurrency tokens.

Image source: Cointelegraph.com

The decision of the court of first instance in Dubai indicates the growing recognition of digital assets in employment contracts, commented on this issue by Irina Heaver, partner at the law firm NeosLegal from the UAE. She also noted that the court’s decision demonstrates a departure from the previous position of the court, when in 2023 a similar lawsuit was rejected because the cryptocurrency that was the subject of the dispute did not have an accurate valuation. According to the lawyer, the current court decision shows that the approach to integrating digital assets into the country’s economic system has become more progressive.

Heaver said the case involved an employee of a local company who sued the employer for failure to pay him wages, compensation for wrongful dismissal and other payments. His employment contract stated that, in addition to the usual cash, he receives 5,250 EcoWatt tokens monthly. The dispute arose due to the fact that the employer did not pay part of the salary in cryptocurrency for six months.

When considering a similar case in 2023, the court recognized the legality of the inclusion of EcoWatt tokens in the employment contract, but did not oblige the employer to repay the debt, since the plaintiff did not provide a clear method for valuing the cryptocurrency in monetary terms. According to Hiver, this year the court took a step forward, ruling in favor of the plaintiff and obliging the employer to pay the agreed amount in cryptocurrency in accordance with the employment contract.

It is noted that the court’s decision in favor of the plaintiff will create a positive precedent that will stimulate the further integration of digital currencies into everyday financial transactions. According to Hiver, this will lead to a more inclusive and innovative business environment.