The Dubai Court of First Instance has approved the payment of wages in cryptocurrencies such as Bitcoin, Ethereum and XRP under employment contracts.
The ruling marks an important milestone in the UAE’s legal stance on cryptocurrencies, notably marking a shift from the court’s previous position in 2023. At the time, the case was dismissed due to a lack of accurate valuation of the cryptocurrencies involved.
Background
The case concerned an employee who sued his employer for wrongful dismissal and unpaid wages. The employment contract specified a salary in fiat currency, plus an additional 5,250 EcoWatt tokens. The dispute arose after the employer failed to pay the cryptocurrency portion of his salary for six months.
In 2023, a court acknowledged that the labor contract included Ecowatt tokens, but refused to enforce payment in cryptocurrencies because the employees had failed to provide a reliable way to convert the value of the tokens into traditional currencies.
According to Irina Heber, a lawyer at UAE-based law firm NeosLegal, the ruling reflects a conservative approach and emphasizes the need for concrete evidence when dealing with non-traditional payment methods.
This year, the court issued a notable reversal ruling in favor of an employee, ordering that he be paid his salary in cryptocurrency as set out in his employment contract, without requiring it to be converted into traditional currency.
Heber noted that the decision marks an important milestone in the promotion of cryptocurrency recognition in employment contracts, which he believes signifies a progressive approach towards the integration of cryptocurrencies into the country’s legal and economic systems.
Moreover, lawyers point out that the ruling sets a positive precedent and will encourage the increased adoption of cryptocurrencies in everyday financial transactions.
Notably, countries such as New Zealand have already begun accepting cryptocurrencies as a legitimate form of payment for income and salary, and as The Crypto Basic reported in 2022, a financial institution in Texas offered Bitcoin salaries to its employees.
Essentially, as the use of crypto assets continues to grow in popularity, more regions will likely follow suit and adopt similar approaches, paving the way for wider acceptance of cryptocurrencies in mainstream financial transactions.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. The views expressed in this article may include the personal opinions of the author and do not reflect the opinions of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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