insights Article
Can Employers Pay Employees in Cryptocurrency in the UAE?
In recent years, the concept of paying employees in cryptocurrency has moved beyond theory.
In the United Arab Emirates (UAE), particularly within the technology, fintech, and blockchain fields, some companies have begun incorporating digital assets into employee compensation packages. In certain cases, employees may also negotiate to receive part of their remuneration in cryptocurrency.
For several years, the legal status of such arrangements remained uncertain. This changed in July 2024, when the Dubai Court of First Instance issued Case No. 1739 of 2024.
The judgment confirms that UAE Courts may recognize cryptocurrency as a valid form of remuneration where it is clearly agreed upon between the parties in the employment agreement.
While the ruling confirms contractual enforceability, practical and regulatory constraints indicate that cryptocurrency cannot yet fully replace traditional salary payments.
A. What does the UAE Labor Law say about Salary Payments?
The starting point is Federal Decree Law No. 33 of 2021 on the Regulation of Labor Relations.
Article 22(3) provides: “Wages shall be paid in another currency if agreed upon between the parties in the employment contract”.
The provision does not expressly refer to cryptocurrency; it establishes an important principle: the parties may agree on an alternative currency for the payment of wages, provided the agreement is clearly reflected in the employment contract.
This contractual flexibility potentially allows remuneration structures that include a cryptocurrency component, particularly in sectors where digital assets are already part of regular business operations.
B. The Legal Nature of Wages under the UAE Law
The Civil Transactions Law (Federal Law No. 5 of 1985 (the previous version)) reinforces the principle that wages are a legally enforceable right.
Article 912(1) provides: “The employer must pay the agreed remuneration to the employee when he performs his work”.
This provision reflects a fundamental contractual principle under UAE Law: once the remuneration is agreed upon in an employment agreement, it becomes a binding contractual obligation, rather than a discretionary benefit.
In the 2024 Dubai case cited herein, the Court relied on this legal principle to treat the cryptocurrency element of the employee’s compensation as a contractual debt owed by the employer, enforceable in the same way as any other salary component.
C. The Wage Protection System: A Structural Limitation
Despite the contractual flexibility provided by the Labor Law, the Wage Protection System (WPS) introduces a significant operational constraint.
The WPS is an electronic salary monitoring system administered by the Central Bank of the UAE (CBUAE) and the Ministry of Human Resources and Emiratisation (MoHRE). Under this system, employers are required to submit a monthly Salary Information File (SIF) detailing each employee’s salary, payment date, and related information.
However, the WPS infrastructure currently only supports fiat currency payments.
As stated in Article 5.4.1-h of the Wages Protection System - Companies Responsibility Guide: “All employees must be paid in the National currency (Arab Emirate Dirham) through one of the agents of the WPS in the country.
D. Employers subject to the WPS
The WPS applies to most private-sector employers registered with MoHRE, including companies operating in major UAE free zones such as:
- Jabal Ali Free Zone (JAFZA)
- Dubai Multi Commodities Centre (DMCC)
However, two financial free zones operate under separate employment law frameworks and are not subject to the WPS:
- Dubai International Financial Centre (DIFC)
- Abu Dhabi Global Market (ADGM)
Companies established within these jurisdictions may therefore have greater structural flexibility when designing cryptocurrency remuneration arrangements.
E. The Regulatory Framework for Stablecoins
In June 2024, the CBUAE issued the Payment Token Services Regulation (PTSR) through Circular No. 2 of 2024.
The Regulations define a “Payment Token” as a virtual asset designed to maintain a stable value by reference to a fiat currency.
Examples include widely used stablecoins such as USDT (Tether) and USDC (USD Coin), as well as potential AED-pegged stablecoins that may be issued in the future.
The Regulation distinguishes between two categories:
The Regulation also prohibits certain categories of tokens from being used as payment instruments in the UAE, including algorithmic stablecoins and privacy tokens.
Foreign Payment Tokens may only be used as a means of payment for the purchase or sale of other forms of virtual assets.
F. Judicial Developments: Two Relevant Cases
Two Court decisions illustrate how the UAE judiciary is approaching cryptocurrency-based remuneration.
In Judgment No. 6943 of 2023, the Court acknowledged that the employee’s agreement included payment in EcoWatt tokens. However, it ultimately refused to award the tokens because the employee failed to provide a clear method for determining their value in fiat currency.
The Court therefore declined to enforce the claim.
A different outcome emerged in Case No. 1739 of 2024. In this case, the Dubai Court of First Instance recognized the cryptocurrency component of the employee’s remuneration and ordered the employer to pay the tokens, rather than converting them into dirhams.
This decision reflects a more progressive judicial approach and confirms that cryptocurrency remuneration can be enforceable when it is clearly agreed upon and properly documented.
G. Conclusion: The Emergence of a Hybrid Compensation Model
Although the 2024 ruling confirms the contractual validity of cryptocurrency remuneration, it does not eliminate the structural limitations imposed by the WPS and related administrative requirements.
In practice, this means that cryptocurrency cannot currently function as the sole form of salary in most UAE employment arrangements.
Instead, the legally viable structure is a hybrid compensation model.
Given the UAE’s rapid evolution, a future of fully token-based salaries may not be unimaginable. As digital assets gain acceptance beyond business circles and into everyday life, the remaining regulatory barriers may gradually diminish as the legal framework continues to evolve.
