UAE’s Digital Dirham: Shaping a Diverse Future for International Finance

The United Arab Emirates has executed its inaugural government transaction using the Digital Dirham, its central bank digital currency (CBDC), marking a major step forward in its efforts to upgrade its financial systems. The transaction, completed through the mBridge multi-CBDC platform, was finalized in less than two minutes, showcasing the platform’s speed and paving the way for wider implementation, according to a

. This pilot payment, carried out by the UAE Ministry of Finance and Dubai Department of Finance, was recognized as a crucial advancement in bringing CBDCs into government processes, as reported by .

The Digital Dirham pilot is part of the Central Bank of the UAE’s (CBUAE) Financial Infrastructure Transformation Programme and utilized mBridge—a joint platform created with the Bank for International Settlements (BIS), the Bank of Thailand, the People’s Bank of China, and the Hong Kong Monetary Authority. The test confirmed the platform’s capability to handle both domestic and international payments directly, without intermediaries. This follows a cross-border trial in January 2024, which involved a Dh50 million transfer to China, as detailed in a

. UAE authorities stressed that the project supports national objectives to boost financial transparency, shorten settlement periods, and enhance the country’s status as a global fintech leader, as mentioned in a .

Senior officials highlighted the importance of this achievement. H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Minister of Finance, described it as a “landmark moment in transforming government finance,” emphasizing the Digital Dirham’s ability to improve coordination between federal and local agencies, as referenced in a

. Vice President Sheikh Mansour bin Zayed Al Nahyan called the CBDC a foundational element for building a unified digital economy, while CBUAE Governor Khaled Mohamed Balama pointed to its significance in supporting financial stability and driving innovation, as noted by Coinedition.

The UAE’s initiative comes as CBDC development accelerates worldwide. By July 2025, 137 nations are investigating CBDCs, with 49 in pilot stages and three—Bahamas, Jamaica, and Nigeria—having fully launched their digital currencies, according to an

. China’s Digital Yuan (e-CNY) remains the most extensive CBDC pilot, recording $986 billion in transactions, while India’s e-rupee has experienced a 334% surge in circulation. The UAE’s rollout, which began with government transactions, will gradually expand to cross-border and retail uses, with a public release anticipated by the end of the year, as stated in a .

Despite the momentum, some critics warn of risks like privacy issues and possible disruptions to conventional banking. Supporters, on the other hand, believe CBDCs can improve payment systems and promote financial inclusion. The UAE’s strategy, which features regulatory sandboxes and collaboration with private sector partners, is designed to tackle these concerns and encourage adoption, as outlined in the Atlantic Council tracker.

The integration of the Digital Dirham into mBridge also signals broader changes in global finance. As tensions between the U.S. and China influence international monetary trends, China’s e-CNY is viewed as a means to challenge the dominance of the dollar, while platforms like mBridge foster regional partnerships. The UAE’s involvement in these projects positions it as a significant participant in the evolving CBDC ecosystem, as highlighted in the Coinotag report.

With the first transaction now complete, the UAE is moving to the next stage: expanding the Digital Dirham’s applications, enhancing security measures, and preparing for public rollout. As central banks globally work to redefine the future of money, the UAE’s advancements underscore the rapid transition toward digital finance.