According to CoinDesk, a recent court order in Dubai has set a legal precedent by mandating a company to compensate a worker using a cryptocurrency token, as specified in the employment contract. This ruling has sparked discussions about the legitimacy of using crypto for salary payments in the region, though it leaves several questions unanswered.

The court's decision does not necessarily imply that cryptocurrency is legalized for salary payments in general, according to two Dubai-based lawyers. Ankita Dhawan, a senior associate at Métis Institute, noted that the ruling recognizes a specific virtual asset, EcoWatt Tokens, as a legally valid part of an employee’s compensation package. However, it does not clarify which virtual assets are permissible or whether approval from Dubai's Virtual Assets Regulatory Authority would be required.

The order from Dubai's court of first instance, dated July 17, allows for a 15-day appeal period. Due to the private nature of legal proceedings in Dubai, the names of the plaintiff and the company were not disclosed, and it remains unclear if an appeal has been filed. The complainant claimed that the company ceased salary payments for five months before terminating the contract. The court ordered the employer to pay 62,867 dirhams ($17,116) and 39,200 EcoWatt Tokens as unpaid dues. The token's value varies across different price-tracking websites, complicating its valuation in dollar terms.

Navandeep Matta, a senior associate at Kochhar & Co. Legal Consultants, stated that the court's decision supports the payment of salaries in cryptocurrencies, provided both parties agree to this arrangement in the employment contract. This ruling could potentially lead to other sectors incorporating virtual assets into compensation packages. However, the lawyers emphasized that the ruling might be specific to this case and cryptocurrency, raising further questions.

Matta also pointed out that the application of these regulations is currently limited to the Emirate of Dubai and does not extend to the six other emirates of the United Arab Emirates.