Images are for illustrative purposes only. Photo: File
Release date: Thursday, August 22, 2024 at 6:00 AM
Following a landmark ruling by a Dubai court last week, more and more companies in the UAE will likely consider including cryptocurrencies as part of salary packages in the coming years.
However, industry experts warn that people who get paid in cryptocurrencies should not dabble in speculation and invest a large portion of their income in it, as cryptocurrencies are considered highly volatile investments and putting a large portion of one’s monthly income into them could put one in financial difficulty if the price crashes.
As reported by Khaleej Times this week, a Dubai court has ordered companies to pay workers’ unpaid wages in UAE currency and cryptocurrency as outlined in their labor contracts, in what has been called a progressive approach as financial transactions are rapidly evolving.
Stay updated with the latest news, follow KT on our WhatsApp channel.
Many technology companies around the world now pay part of their employees’ salaries in cryptocurrencies, and the trend is set to gain momentum in the UAE.
Industry executives say cryptocurrencies will also become more widely accepted as part of financial packages for companies outside the technology industry.
Munaf Ali, co-founder and managing director of Phoenix Group, said that as regulation around digital currencies and assets develops, more companies will likely consider paying salaries in cryptocurrency.
Ali added that his company is also “considering” issuing cryptocurrency as part of employees’ salaries.
On Wednesday, Abu Dhabi Securities Exchange-listed Phoenix Group and digital asset company Tether announced plans to launch a stablecoin pegged to the UAE dirham in January 2025.
“The adoption of cryptocurrencies is increasing day by day in the UAE and they are being used for retail transactions and internet purchases. Now, more and more people are keen to use cryptocurrencies for real estate transactions. Large developers are eager to accept cryptocurrencies as payments. So, gradually, we will see more of these cases in due course.”
“Once regulations are implemented and approved, it will further drive adoption of cryptocurrencies among all types of businesses waiting for salary payments and people who want to receive their salary in crypto. The advantages (of paying salaries in crypto) are faster payments and lower transaction fees for the payer. Payments can be made anywhere in the world,” Ali told Khaleej Times in an interview.
He elaborated that the stablecoin will have parity with the UAE dirham, meaning that one coin will be equal to one dirham and therefore salary payments will be the exact same amount in digital dirhams.
caveat
Tether CEO Paolo Ardoino said it is important for businesses to consider cryptocurrency as a form of payroll.
However, he warned that it is important not to speculate too much, as people who receive a salary in cryptocurrencies need to live off their income.
“Stablecoins like USDT are representative of a nation’s currency. That’s why certain stablecoins can be safely used as a substitute for money. People are moving their money to digital, and that’s what stablecoins are,” he said.
Tether’s CEO praised the UAE’s approach to digital currency.
“The great thing about the UAE is that it is flexible and runs in a way that embraces innovation. I wish the same could be said about other countries. Unfortunately, some governments can be conservative about what people can do in their country. That’s one of the reasons why so many people move here – if you’re an innovator, you get support from the government,” he said.
See also: