The Central Bank of the United Arab Emirates (CBUAE) and the Ministry of Finance have successfully completed the nation’s first transaction using the “Digital Dirham,” the pilot version of the UAE’s central bank digital currency (CBDC). The payment, processed through the mBridge platform, settled in under two minutes.
Government Test Marks Major Step Toward Digital Currency Integration
The initial test transaction took place between federal and Dubai government entities via mBridge, demonstrating the operational readiness and system integration of the Digital Dirham. According to reports, the transfer was completed in less than two minutes, marking a key milestone in the UAE’s push toward financial innovation.
This pilot highlights the UAE’s commitment to embedding its digital currency into government operations. Analysts say the initiative could pave the way for future use across both the public and private sectors, laying the foundation for a more efficient and interconnected payment ecosystem.
Part of the UAE’s Financial Infrastructure Transformation Program
The Digital Dirham is a core component of the CBUAE’s Financial Infrastructure Transformation (FIT) program. Under the program’s framework, the CBDC will support:
- Wholesale and retail payments
- Cross-border transactions via the mBridge platform
A primer released by the central bank in mid-2025 explained that the Digital Dirham will be non-interest-bearing and fully interchangeable with cash and deposits. It will operate under a two-tier distribution model, meaning users will access it through licensed intermediaries rather than directly through the central bank.
Preparing for a Wider Rollout in 2025
This pilot test precedes a broader public rollout expected in late 2025. By validating the underlying technology, compliance measures, and settlement mechanisms, the government aims to ensure the system is ready for large-scale adoption.
Experts believe the UAE’s early success positions it among global leaders in CBDC experimentation. If the Digital Dirham achieves seamless integration with existing payment systems, it could significantly reduce transaction costs, improve cross-border settlements, and strengthen the nation’s status as a fintech hub.
As the pilot expands to include private-sector and retail participants, the CBUAE will need to carefully address challenges related to privacy, regulation, and interoperability to ensure the system’s long-term sustainability.
