UAE Court Ruling Allows Crypto Benefits but Not Salaries Yet

A UAE court ruling has authorized the use of cryptocurrency for employee benefits, but it does not yet permit crypto as a form of salary payment. This decision represents a step towards integrating digital currencies into compensation packages, though full adoption for salaries remains pending. The ruling highlights ongoing developments in the UAE's regulatory stance on cryptocurrency in the workplace.

Although this ruling is a notable advancement for cryptocurrency adoption, it does not permit full salary payments to be made in digital currencies.

A recent UAE court decision has marked a significant move towards accepting cryptocurrency in employment contracts, though it does not yet allow full salary payments in digital currencies. The ruling, which requires an employer to pay part of an employee's benefits in digital EcoWatt tokens, signals a potential shift in the UAE's financial landscape.

While the decision represents progress, it stops short of enabling complete salary payments in cryptocurrencies. Anna Zeitlin, a partner at Addleshaw Goddard specializing in Fintech and Financial Services, highlighted that UAE’s Wage Protection System (WPS) still requires salaries to be registered in dirhams.

Zeitlin emphasized that the ruling pertains to benefits rather than salaries and noted that any shift to crypto payments would require updates to the WPS. She cautioned about the risks of fluctuating cryptocurrency values affecting employee compensation.

Looking ahead, Zeitlin is optimistic about the ruling's potential to pave the way for broader crypto use, including in salaries. She suggested that authorities might explore using Central Bank Digital Currencies (CBDCs) or stablecoins to reduce volatility risks.

Zeitlin also sees potential for wider cryptocurrency adoption in the UAE, including in real estate and retail. She envisions blockchain technology transforming real estate transactions by speeding them up and broadening market access.

Overall, the UAE continues to advance its crypto-friendly stance, with this court ruling representing another step towards incorporating digital assets into the national economic framework.

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Source: arabianbusiness‍