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The United Arab Emirates completed its first official transaction using a digital dirham between government entities, the Ministry of Finance and Dubai Finance announced this week.
The test transfer, conducted via the mBridge cross-border payment platform, took under two minutes and marks the latest milestone in the central bank’s phased rollout of a national digital currency.
The UAE digital dirham pilot is part of a broader national effort to accelerate digital transformation within public and private sector operations. According to a joint statement from the UAE Ministry of Finance and Dubai Finance, this transaction represents a “major step toward broader adoption of the national digital currency across both government and private sector ecosystems.”
Dubai Finance’s Executive Director of Central Accounts, Ahmed Ali Meftah, emphasized the operational success of the trial, noting that the test was conducted to “ensure seamless technical integration with the Central Bank’s systems.” He added:
“The transaction was completed in less than two minutes, underscoring its goal of enhancing operational efficiency and expediting financial settlements between federal and local government entities.”
The UAE Central Bank reaffirmed that the rollout of the UAE digital dirham will occur in phases, ensuring a smooth transition to digital currency infrastructure. A policy paper published in July revealed that the first phase will focus exclusively on digital payments, avoiding overlap with traditional interest-bearing products such as savings or loans.
According to the paper, the UAE digital dirham aims to “future-proof central bank money for the digital era” and respond to the evolving demands of the digital economy. The phased rollout will prioritize stability, scalability, and interoperability across local and international payment systems.
Globally, central bank digital currencies (CBDCs) remain a hotly debated topic. While critics argue that CBDCs could threaten privacy or disrupt commercial banking, advocates see them as tools for financial inclusion, transparency, and faster cross-border payments.
According to data from the Atlantic Council, only three countries — Nigeria, the Bahamas, and Jamaica — have officially launched a CBDC to date. Meanwhile, 49 other nations, including the UAE, are in various stages of pilot testing.
In October, Kyrgyzstan announced plans for its own CBDC, while the European Central Bank confirmed that its digital euro project is moving to the next phase.
“The UAE’s leadership in the CBDC space is not just about innovation — it’s about positioning itself as a global hub for digital finance,” said Dr. Waleed Al Hosani, an independent fintech analyst based in Abu Dhabi. “The UAE digital dirham could redefine how the government and private sectors transact, ensuring faster, more transparent financial operations.”
The completion of the first UAE digital dirham transaction highlights the UAE’s determination to become a regional leader in financial technology and digital transformation. As part of the UAE’s “Digital Economy Strategy 2031”, the initiative aligns with national goals to double the contribution of digital sectors to GDP.
The successful test demonstrates the government’s capability to execute complex digital payment systems, potentially paving the way for wider adoption in retail and cross-border trade.
Experts believe that as the UAE digital dirham project progresses, it could significantly reduce transaction times, cut operational costs, and boost financial inclusion for underbanked populations across the Middle East.
The UAE digital dirham’s first transaction marks a pivotal moment in the nation’s journey toward a fully digital economy. With a phased rollout expected to begin by late 2025, the UAE is clearly signaling its intent to lead the global CBDC race.
As global observers watch the UAE digital dirham project unfold, it’s becoming increasingly clear that the UAE is not just experimenting — it’s setting the standard for digital financial innovation in the 21st century.
