Crypto regulation in the world: weekly digest #109

UAE

The Dubai Court of First Instance has issued a groundbreaking ruling that allows cryptocurrency to be used as a valid form of salary payment under employment contracts. This decision marks a significant shift in the UAE's legal framework and its stance on digital currencies.

It contrasts with a previous judgment in 2023 where a similar claim involving crypto was denied due to the lack of a precise valuation method, the 2024 ruling recognizes the validity of crypto salary payments as stipulated in employment contracts, even ordering the employer to pay the unpaid portion in crypto tokens without converting to fiat.

The court relied on the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021 to ensure consistency in applying legal principles. The decision sets a precedent for the wider acceptance of crypto in employment contracts** across the UAE and supports the country's vision to become a global hub for the digital economy.

This landmark ruling demonstrates Dubai's progressive approach to integrating digital currencies into its legal and economic framework. It is expected to encourage further adoption of crypto in various sectors and lead to the development of new payment processing methods.

The decision also emphasizes the importance of having precise contractual agreements regarding the mode of salary payment, whether in fiat or cryptocurrency. Employers should ensure that such terms are clearly stated and understood by both parties. Overall, Dubai's court ruling is a significant step forward in recognizing crypto as a legitimate payment method and will likely influence other jurisdictions to follow suit.

About crypto adoption in Dubai and UAE you can see in one of our previous articles.

IMF

International Monetary Fund (IMF) has issued a new report highlighting the growing environmental concerns associated with cryptocurrency mining, particularly in relation to carbon emissions.

Crypto mining, alongside data centers, accounted for 2% of global electricity use in 2022, with projections suggesting this could rise to 3.5% by 2027. This increase is comparable to the current electricity consumption of Japan, the fifth-largest user globally. The IMF estimates that crypto mining could generate approximately 0.7% of global carbon dioxide emissions by 2027. This is a significant concern as the sector's carbon footprint is expected to grow, with the potential to reach 450 million tons of CO2 emission.

The report suggests that implementing a direct tax on electricity consumption could incentivize the crypto mining industry to reduce emissions. For instance, a tax of $0.047 per kilowatt hour could lead to a reduction of 100 million tons in annual emissions, while generating substantial government revenue.

A similar UN study also emphasizes the environmental impacts of Bitcoin mining, which has been linked to significant carbon, water, and land footprints. It noted that 67% of the electricity used for Bitcoin mining in 2020-2021 was derived from fossil fuels, primarily coal, contributing to a substantial carbon footprint.

The IMF advocates for coordinated international policies to curb emissions from crypto mining, emphasizing the need for a comprehensive approach to mitigate the environmental impact while balancing the economic benefits of digital currencies.

The report underscores the urgent need for regulatory frameworks that address the ecological consequences of crypto mining, aligning financial innovation with environmental sustainability.

Ghana

Ghana's Central Bank (BoG) has recently proposed new regulations aimed at overseeing the country's cryptocurrency market. This initiative reflects a growing recognition of the need for a structured approach to manage digital assets and ensure consumer protection, financial stability, and compliance with international standards.

The BoG is working on a comprehensive regulatory framework designed to govern the activities of cryptocurrency service providers and users. This framework aims to create clear guidelines for the operation of digital asset businesses within the country. The new regulations emphasize the importance of safeguarding consumers in the cryptocurrency space, which has been marked by volatility and potential fraud. The BoG intends to implement measures that will enhance transparency and accountability among crypto service providers.

The proposed rules are aligned with global best practices, particularly concerning anti-money laundering and combating the financing of terrorism. This alignment is crucial for Ghana to integrate more effectively into the global financial system and attract foreign investment. The central bank has indicated that it will engage with stakeholders, including industry participants and the general public, to gather feedback on the proposed regulations. This consultative approach aims to ensure that the regulations are practical and address the concerns of all parties involved.

Cryptocurrency adoption in Ghana is on the rise, driven by several factors that create a conducive environment for digital asset utilization. Ghana is one of the more promising crypto markets in Africa, though it still trails behind countries like Nigeria, South Africa, and Ethiopia.

News from other countries:

• Russian Ministry of Finance has proposed allowing cryptocurrency trading on major registered stock exchanges, such as the Moscow Exchange and St. Petersburg Exchange. This initiative aims to create a regulated framework for digital asset trading, contingent upon establishing adequate legal conditions.

• Iran has initiated a reward program offering approximately $20 to citizens who report illegal cryptocurrency mining operations. This move comes in response to severe power shortages exacerbated by a significant heatwave affecting the country's electricity grid. The Iranian authorities aim to mitigate the impact of unregulated crypto mining, which has been straining the national power infrastructure significantly. We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!