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Salary in cryptocurrency: Will more UAE companies pay wages in e-cash?

Employees earning salaries in cryptos warned against speculating as they have to survive on that income

Published: Thu 22 Aug 2024, 6:00 AM

Updated: Sat 24 Aug 2024, 12:56 PM

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More and more companies in the UAE will look into including cryptocurrencies as part of the salary package in the coming years following the landmark ruling by the Dubai court last week.

However, industry experts warn that people who earn salaries in cryptocurrencies should not get into speculations and invest large amounts of their income. Cryptocurrencies are considered highly volatile investments and pumping a big chunk of monthly income into them could lead to financial troubles, if prices crash.

As reported by Khaleej Times this week, a Dubai court ordered a company to pay a worker’s outstanding due in UAE currency and cryptos as mentioned in the labour contract. It is also being termed as a progressive approach as the financial tender is evolving at a great pace.

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Currently, many technology companies are paying part of their employees’ salaries in cryptocurrency globally and this trend will gain momentum in the UAE as well, going forward.

Industry executives say that cryptos will gain broader acceptance as part of the financial package by companies beyond the technology industry.

Munaf Ali, co-founder and managing director, Phoenix Group, said as regulations progress around digital currencies and assets, many companies will look into offering salaries in cryptocurrencies.

Ali added that his company is also "looking into" making cryptocurrencies as part of employees’ salaries.

On Wednesday, Abu Dhabi Securities Exchange-listed Phoenix Group and digital asset firm Tether announced a plan to launch a stablecoin pegged to the UAE dirham in January 2025.

“The adoption of cryptos is growing day by day in the UAE and they can be used for retail transactions and Internet purchases. Now, we are seeing people wanting to use it for real estate transactions. Large developers are actively accepting cryptocurrencies for payments. So gradually, in due course, we see a lot more of this."

Ali said: “Once regulations are in place and approved, we will see much more adoption from all type of companies waiting to pay and people wanting to receive their salaries in cryptocurrencies. The advantage (of paying salaries in cryptos) is the speed of getting paid and reduced transaction fees for paying people. They can be paid anywhere in the world,” he told Khaleej Times in an interview.

He elaborated that stablecoin will be at par with the UAE dirham meaning, one coin will be equal to one dirham, hence paying salary will be exactly the same amount in digital dirhams.

Warning

Paolo Ardoino, CEO of Tether, said it is important for companies to look at cryptocurrencies as a form of salary payment.

However, he warned that it is important that people who are receiving salaries in cryptos are not speculating excessively because they have to live on that income.

“Stablecoin – like USDT – is representative of national currency. For that reason, certain stablecoins are safe to be used as a substitute for money. People are shifting money towards digital and that is stablecoin,” he said.

Tether chief executive praised the UAE’s approach towards digital currencies.

“The beauty of UAE is that it is flexible and is run in a way that positively looks at innovation. I wish I could say the same thing about other countries also. Unfortunately, certain governments tend to be conservative when it comes to what people can do in their countries. That is one of the reasons a lot of people are moving here. That is because if you are an innovator, you will be supported by the government,” he said.

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