The Dubai Court of First Instance has officially recognized cryptocurrencies in employment contracts for wage payments. This decision, case number 1739 of 2024, is a significant divergence from the same court’s 2court’sing, which dismissed a related bitcoin claim.
An employee filed a lawsuit against an employer alleging unpaid wages totaling 5,250 EcoWatt tokens, which were supposed to constitute payment for six months of labor. The contract stipulated that the worker would be paid a monthly fee in fiat currency, with EcoWatt tokens serving as a backup pay source. Legal problems resulted from the bitcoin portion of the salary never materializing.
The court’s decision recognized cryptocurrencies as a legitimate means of payment, citing Federal Decree No. 33 of 2021 and Article 912 of the UAE Civil Transactions Law. Additionally, this ruling demonstrates the UAE judiciary’s ability to adjust to the increasing adoption and integration of digital currencies across all industries.
cryptocurrencies Gain Legal Recognition In 2024
Moreover, the 2024 ruling contrasts with a 2023 judgment in which the court refused to enforce a similar cryptocurrency payment. In 2023, the court’s denial was due to the employee’s failure to provide an exact valuation of EcoWatt tokens in fiat currency.
This lack of precise valuation led to the court’s cautious approach. The court hesitated to accept cryptocurrency payments without clear value in fiat terms. This earlier decision highlights the court’s more conservative stance at that time.
However, the 2023 ruling emphasized the need for tangible evidence of digital currency value for enforcement. In 2024, the court changed its stance. It was ruled that unpaid salaries should be paid using EcoWatt tokens. Conversion to fiat currency was not required. However, this marked a significant shift in the legal perspective.
Additionally, the victory benefits the claimant and sets a precedent for cryptocurrency in UAE employment contracts. The judgment reflects a modern legal approach. It acknowledges the growing importance of digital currencies. This decision could lead to wider acceptance of crypto in the economy. However, the UAE is now seen as more open to digital innovation.
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