A Dubai court officially recognized the legality of salary payments made in digital currencies, on 15 August 2024.
Calling its “a significant evolution of the UAE judiciary’s approach to cryptocurrency,” a Dubai legal firm said that the Dubai Court of First Instance made a landmark ruling recognizing the payment of salaries in cryptocurrency under employment contracts.
Dubai courts have declared Crypto currencies a legal form of salary payment…
… Bullish on Dubai 💎 pic.twitter.com/57cctATTjr
— Phill Smith (@phillsmith_) August 16, 2024
Dubai Court’s 2023 Verdict v/s 2024 Verdict
The Dubai court was faced with an employment dispute in 2023, where part of the employee’s remuneration was supposed to be paid in EcoWatt tokens.
While the court acknowledged the inclusion of the tokens in the employment contract, it ultimately refused to award the amount in EcoWatt tokens. Apparently, the refusal was based on the employee’s failure to provide a clear method of calculating the value of the cryptocurrency in terms of its equivalent in fiat currency.
According to legal observers, the court’s reasoning in the 2023 case reflected a more traditional view. It required precise and tangible evidence of financial obligations, especially when dealing with unconventional forms of payment like digital currencies.
However, the Dubai Court demonstrated a more progressive stance in the 2024 judgment.
The court again addressed an employment dispute involving remuneration in EcoWatt tokens. This time, the court ruled in favor of the employee, not only recognizing the validity of payment in cryptocurrency but also ordering the payment to be made in EcoWatt tokens rather than converting it into fiat currency.
Decision Sets Precedent In Dubai: Businesses May Explore Crypto As Viable Salary Payment Option
The UAE sees the Dubai Court’s 2024 ruling as a testament to the country’s progressive legal environment, particularly regarding the use of digital currencies in employment contracts.
“The court’s willingness to enforce cryptocurrency payments, as stipulated in contracts, sets a positive precedent that will likely encourage further integration of digital currencies in various sectors, not just in employment,” the legal firm said.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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