The Dubai Court of First Instance has officially recognized cryptocurrency in employment contracts for the purpose of salary payments. This ruling, case number 1739 of 2024, marks a significant departure from a 2023 judgment by the same court, where a similar claim involving cryptocurrency was denied.
The case was brought forth by an employee against an employer over unpaid wages, which were to be compensated for six months’ work in the sum of 5,250 EcoWatt tokens. According to the contract, the employee was due to receive a monthly fee in fiat money, which would always be supplemented by compensation in EcoWatt tokens. Because this cryptocurrency part of the salary never materialized, it gave rise to legal disputes.
In its ruling, the court acknowledged cryptocurrency as a valid form of remuneration, drawing on Article 912 of the UAE Civil Transactions Law and Federal Decree No. 33 of 2021. This decision underscores the UAE judiciary’s readiness to adapt to the growing acceptance and integration of digital currencies in various sectors.
2024 Judgment Embraces Cryptocurrency
The 2024 ruling sharply contrasts with a prior judgment made in 2023, when the court refused to enforce a similar cryptocurrency payment. Denial was based on the failure of the employee to provide an exact valuation for these EcoWatt tokens in relation to their fiat currency value, thereby reflecting rather a cautious approach by the court at that particular time.
What was emphasized by the 2023 ruling was the requirement that there first had to be tangible evidence of the value in digital currency if it were ever to be enforced. However, the court’s stance was completely opposite in 2024, as it ruled that the employer should pay the unpaid salary portion in EcoWatt tokens and not convert them into any fiat currency.
It is not only a victory for the claimant but also helps to set a precedent for the wider acceptance of cryptocurrency in employment contracts across the UAE. The judgment gives the perception of an enlightened legal environment that acknowledges the increasing role that digital currencies play in the economy today.
