Dubai: The Dubai Court has ruled that digital currencies are accepted as a legally recognized means of paying employees’ salaries.

In an unprecedented move, the Dubai Court of First Instance ruled that salaries in cryptocurrencies are legal under employment contracts. This ruling, issued in Case No. 1739 of 2024, is a major shift in the UAE’s legal stance on crypto.

Lawyers including Irina Heaver, a partner at NeosLegal in the UAE, hailed the ruling as a “progressive approach” in line with the ever-evolving nature of financial transactions in the Web3 economy.

Employment Contract Disputes Give Way to Crypto’s Legitimacy

The legal dispute that led to this landmark ruling centred on a dispute between the plaintiff, an employee, and her employer, whereby the employee had not received her wages, compensation for wrongful dismissal and other entitlements.

The employment contract stipulated that part of the employee’s monthly salary would be paid in cash, in addition to 5,250 EcoWatt coins (a digital currency), but the employer did not pay the digital currency portion of the salary for six months, which prompted the employee to file a lawsuit.

In its ruling issued in 2024, the Dubai Court of First Instance ruled in favor of the employee, affirming the legality of paying wages in digital currencies as stipulated in the employment contract, and ordered the employer to pay the salary in EcoWatt - in accordance with the employment contract - without the need to convert it into cash currencies.

This decision represents a major shift from the court’s previous position in a similar case in 2023, where a claim for wages to be paid in crypto was rejected because there was no clear way to determine the value of these coins.

Commenting on the ruling, Irina Heffer said:

“This decision reflects the growing acceptance of cryptocurrencies in employment contracts and highlights the court’s recognition of the ever-evolving nature of financial transactions in the third web economy.”