Following a landmark Dubai court ruling, more UAE companies are exploring cryptocurrency as part of salary packages, though experts caution against excessive speculation.
Introduction In a move that could signal a significant shift in the financial landscape of the UAE, more companies are expected to consider paying salaries in cryptocurrencies. This trend follows a landmark ruling by a Dubai court, which ordered a company to pay a worker’s outstanding dues in both UAE currency and cryptocurrency as stipulated in the labor contract. The decision is seen as a progressive step in the fast-evolving financial sector.
Crypto Salaries: A Growing Trend The UAE’s interest in cryptocurrency as a part of employee compensation packages is not entirely new but is poised to gain momentum. Currently, many technology firms worldwide are already paying a portion of their employees’ salaries in digital currencies. In the UAE, this trend is anticipated to extend beyond the tech industry, with companies across various sectors exploring this option.
Munaf Ali, co-founder and managing director of Phoenix Group, highlighted the growing acceptance of cryptocurrencies in the UAE. “As regulations progress around digital currencies and assets, many companies will look into offering salaries in cryptocurrencies,” he stated. Ali also mentioned that Phoenix Group is already incorporating cryptocurrencies into their employees’ salary packages.
Industry Experts Advise Caution Despite the increasing adoption, industry experts urge caution. Cryptocurrencies are known for their volatility, and investing large portions of one’s income in digital assets could lead to financial difficulties if market prices plummet. Paolo Ardoino, CEO of Tether, emphasized the importance of prudence. “It is important that people who are receiving salaries in cryptos are not speculating excessively because they have to live on that income,” Ardoino said.
He also noted that stablecoins, such as USDT, which are pegged to national currencies, offer a safer alternative for salary payments. “Stablecoin – like USDT – is representative of national currency. For that reason, certain stablecoins are safe to be used as a substitute for money,” Ardoino explained.
Phoenix Group and Tether’s Stablecoin Initiative In a significant development, Phoenix Group and digital asset firm Tether have announced plans to launch a stablecoin pegged to the UAE dirham in January 2025. This stablecoin, set to be equal to one dirham, aims to facilitate smoother and faster transactions, including salary payments. Ali expressed optimism about the future of cryptocurrency adoption in the UAE, particularly once regulatory frameworks are fully established. “Once regulations are in place and approved, we will see much more adoption from all types of companies waiting to pay and people wanting to receive their salaries in cryptocurrencies,” he told Khaleej Times.
Advantages of Crypto Salaries The adoption of cryptocurrency for salary payments offers several advantages, particularly in terms of transaction speed and reduced fees. Ali highlighted these benefits, noting that employees can receive payments anywhere in the world quickly and cost-effectively. “The advantage of paying salaries in cryptos is the speed of getting paid and reduced transaction fees for paying people,” he said.
Conclusion As the UAE continues to embrace innovation, the inclusion of cryptocurrency in salary packages could become a defining feature of its financial landscape. While the legal and regulatory frameworks are still evolving, the recent court ruling and the growing interest from companies signal a broader acceptance of digital currencies. However, as experts caution, the volatile nature of cryptocurrencies necessitates a measured approach, especially when it comes to managing personal finances. The future of salaries in the UAE may well be digital, but it will require a careful balance between innovation and financial prudence.
