Dubai Court Greenlights Cryptocurrency Salary Payments

In a significant shift for employment law in the United Arab Emirates, the Dubai Court of First instance has ruled that employers can legally pay employee salaries using cryptocurrencies. This landmark decision confirms that employers are not obligated to convert the value of these digital assets into conventional fiat currencies when making payments.

This ruling, grounded in the UAE Civil Transactions Law and Federal decree-Law No. 33 of 2021, represents a notable evolution in Dubai’s case law. Previously, the courts had been hesitant to enforce salary payments made via cryptocurrencies, citing a lack of a clear mechanism to accurately determine the equivalent fiat currency value of such digital assets.

Experts in Dubai, including Marie Chowdhry and Luke tapp from Pinsent Masons, suggest this judgment could reshape how employment contracts are drafted, especially within industries that are rapidly adopting digital technologies. Chowdhry commented that this decision may foster the broader application and use of digital currencies across various sectors, aligning with the UAE’s ambition to be a leader in technological innovation.

tapp emphasized the importance of clarity in contractual agreements, stating, “The judgment reinforces the idea that contractual provisions in employment contracts should be precise. Employers should ensure that any mode of payment used in the contract, weather fiat or cryptocurrency, is clearly stated and understood.”

Chowdhry also noted that this is an area to monitor closely. She added, “This judgment was given in the Dubai Court of First Instance and therefore may be challenged