Getting paid in cryptocurrency is gaining momentum, particularly after a significant ruling from a Dubai court on August 15. In a groundbreaking decision, the Dubai Court of First Instance recognised crypto assets as a valid means of salary payment, marking a notable step towards the integration of digital currencies into traditional financial systems.
This ruling arose from a dispute between an employee and their employer over unpaid wages, a portion of which was agreed to be paid in crypto tokens. The court sided with the employee, ordering the employer to fulfil the owed salary in cryptocurrency. This decision contrasts sharply with a similar case from 2023, where the court rejected a claim because of issues related to the valuation of the digital assets involved.
The decision is being hailed as a positive development by many in the legal and financial sectors. Irina Heaver, a partner at the United Arab Emirates-based law firm NeosLegal, expressed optimism over the court’s recognition of crypto assets in wage disputes. She noted that it sets a positive precedent for the future of digital currencies in the region, as more courts and businesses begin to understand and accept the advantages of paying salaries in crypto. “It is reassuring to see the court recognise that wages, whether paid in fiat or cryptocurrency, are the rightful entitlement of the employee for their agreed-upon work,” Heaver said.
The UAE, however, is not alone in this growing trend. Other countries such as Japan, the United States, and Australia have also been establishing frameworks to facilitate cryptocurrency transactions, particularly in the area of payroll. The recent ruling in Dubai highlights a larger global movement towards recognising crypto as a viable and efficient alternative to traditional payment methods.
Crypto Compensation on the Rise
The growing trend of paying salaries in cryptocurrency is not confined to courtrooms. Companies operating in the Web3 space, particularly those whose business models are closely tied to decentralised technologies, have already embraced the concept of crypto compensation.
Tomi Fyrqvist, co-founder of the decentralised social app Phaver, shared that almost all of the firm’s contractors initially opted to receive their salaries in crypto when given the choice. While the percentage has since dipped due to issues with certain centralised exchanges (CEX) not supporting specific withdrawals, the demand remains robust. Fyrqvist suggested that, if the issues with off-ramp solutions were resolved, the percentage of employees opting for crypto salaries would likely rise again.
Similarly, Patrick Mullin, CEO and co-founder of the real-world asset tokenisation platform Mantra, observed a growing number of employees preferring to receive their pay in digital currencies. Mullin noted that the ethos of Web3 — decentralisation, transparency, and independence from traditional banking systems — aligns naturally with employees in the sector. Many workers in the industry are already well-versed in managing a diverse range of digital assets on-chain, making crypto salaries a comfortable and appealing option for them.
“When building in Web3, it is natural for people to manage their personal funds on-chain,” Fyrqvist added. “There has been a natural demand to receive salaries from our end in crypto, with our employees choosing to handle reporting and other requirements themselves.” For these employees, the appeal of crypto salaries extends beyond familiarity with blockchain technology. The convenience and speed of crypto transactions, particularly for international payments, are strong factors driving the trend.
Cross-border remittances, which typically take days or even longer using traditional banking systems like SWIFT, can be completed much faster with cryptocurrency. For businesses with employees spread across multiple countries, crypto offers a streamlined alternative that can significantly reduce both time and costs.
Challenges in Paying with Crypto
While the appeal of paying salaries in cryptocurrency is growing, significant challenges remain. Regulatory compliance, in particular, is a hurdle that companies must carefully navigate. With the rise of digital currencies, governments are paying closer attention to tax obligations, anti-money laundering laws, and other legal requirements.
Both Fyrqvist and Mullin admitted that compliance has been a tricky issue for their companies. To ensure adherence to local regulations, Phaver partnered with a firm that specialises in crypto payroll, allowing the company to manage salaries for employees in over 10 countries while staying within legal boundaries. This partnership has helped alleviate some of the complexities involved in managing payroll for a global workforce.
Fyrqvist pointed out that, despite the demand for crypto salaries, regulatory restrictions sometimes force companies to rely on third-party providers, even if it means paying some employees in fiat currency instead of crypto. “To ensure we adhere to local laws while still building the necessary crypto-compatible payroll systems, many from our team were moved to third-party providers to have compliance/accounting/tax buttoned up, even if it meant some people getting their salaries in fiat,” Fyrqvist said. This illustrates the careful balancing act required when offering crypto salaries, as companies must juggle employee preferences with regulatory obligations.
Even with these challenges, the trend of crypto salaries is likely to continue growing. As governments around the world establish clearer regulations surrounding cryptocurrency transactions, it’s expected that more companies will adopt digital currencies as part of their payroll options. The recent ruling by the Dubai court is a significant step in that direction, reinforcing the legitimacy of crypto as a form of compensation and encouraging other businesses to explore similar avenues.
For employees, the option to receive payment in crypto opens up new opportunities. Digital assets can be more versatile than fiat currency, particularly for those who are already comfortable with managing cryptocurrency wallets and navigating the blockchain. The decentralised nature of crypto can also provide an additional layer of independence from traditional banking systems, which can be especially appealing for workers in the tech and finance sectors.
Future Prospects
The decision by the Dubai Court of First Instance marks a turning point in the acceptance of crypto as a legitimate form of payment. While the journey towards widespread adoption of cryptocurrency salaries is far from over, the ruling signals a shift in attitudes that could pave the way for further developments. As more courts, companies, and regulators acknowledge the benefits of digital currencies, the integration of crypto into everyday financial systems is expected to continue its upward trajectory.
In the near term, the ruling could encourage more businesses in the UAE and beyond to consider paying salaries in crypto, particularly as legal frameworks around cryptocurrency become more defined. For now, companies like Phaver and Mantra are leading the charge, experimenting with crypto salaries and working to overcome the legal and logistical challenges that come with it.
Crypto payments may not yet be the norm, but the landscape is changing rapidly. With courts, businesses, and employees showing increasing interest in digital currencies, it seems only a matter of time before crypto salaries become more widely accepted. The recent ruling in Dubai is just one example of how the world is slowly but surely moving towards a future where getting paid in crypto is not just possible but commonplace.
