The United Arab Emirates has completed its first transaction using the Digital Dirham, marking a major milestone in the country’s central bank digital currency (CBDC) initiative.According to an official announcement, the transaction was jointly executed by the Ministry of Finance and Dubai Finance as part of the pilot phase of the Digital Dirham project, using the mBridge government payment platform.Officials said the transaction represents a key step toward broader adoption of the national digital currency across both public and private sector operations.First Transaction Completed in Under Two MinutesDubai Finance’s Executive Director of Central Accounts, Ahmed Ali Meftah, said the transaction was designed to test operational readiness and ensure seamless technical integration between the Ministry of Finance and the Central Bank’s systems.The transfer was completed in less than two minutes, demonstrating the Digital Dirham’s potential to improve settlement speed, reduce transaction costs, and enhance overall payment efficiency across government entities.Rollout to Be Conducted in PhasesThe Central Bank of the UAE has said that the Digital Dirham will be rolled out in stages, with the initial phase focused solely on payments functionality.The phased approach aims to modernize the UAE’s financial infrastructure while ensuring stability and compatibility with existing monetary systems. The Digital Dirham is expected to support instant payments between federal, local, and eventually private entities, laying the groundwork for future cross-border settlements.Part of the UAE’s Broader Digital Economy VisionThe Digital Dirham project is a cornerstone of the UAE’s Financial Infrastructure Transformation (FIT) program — an initiative to future-proof the country’s monetary system for the digital era.By introducing a government-backed digital currency, the UAE aims to boost financial inclusion, reduce settlement risks, and strengthen regional leadership in digital finance.The Central Bank earlier indicated that the nationwide rollout is expected to begin in late 2025, following comprehensive testing and evaluation during the current pilot phase.
Catherine
