UAE’s Digital Dirham CBDC Pilot Achieves First Transaction

The United Arab Emirates has completed the inaugural transaction using its central bank digital currency (CBDC) as part of the ongoing pilot program. This is the first significant progress on the project since its announcement in March.

Key Takeaways

The UAE has successfully executed the first transaction using its CBDC, called the Digital Dirham.
The transaction was conducted as part of the pilot phase and utilized the mBridge payment platform.
The rollout of the CBDC is expected to occur in phases, starting with payment features only.
Currently, only Nigeria, the Bahamas, and Jamaica have officially launched their CBDCs.

UAE’s ‘digital dirham’ CBDC pilot completes first transaction

The UAE’s Ministry of Finance and Dubai Finance revealed on Tuesday that this transaction utilized the government payment platform mBridge, marking a historic moment for the UAE government and highlighting efforts to enhance the use of the national digital currency within both governmental and private sectors.

The successful transaction is the first major update regarding the CBDC since the Central Bank of the UAE indicated in March that it anticipates rolling out the digital currency in the fourth quarter of 2025.

Source: Maktoum bin Mohammed

Quick Transaction Time

Ahmed Ali Meftah, the executive director of central accounts at Dubai Finance, noted that the transaction was executed to “test operational readiness and ensure seamless technical integration with the Central Bank’s systems.” Remarkably, the transaction took less than two minutes to complete.

Phased Rollout Plan

In a policy document published in July, the UAE Central Bank identified the CBDC initiative as a means to modernize central bank currency for the digital age, catering to the evolving demands of a digital economy.

The report also explained that the rollout would occur in phases, initially offering limited features focused solely on payments to prevent competition with savings and other interest-earning financial services.

The discussion surrounding CBDCs remains contentious. Critics express concerns that these digital currencies may violate privacy and disrupt the financial sector by enabling users to access services provided directly by central banks. In contrast, supporters argue that CBDCs could enhance payment efficiency and promote financial inclusion.

Current CBDC Landscape

As global interest in CBDCs grows, many governments are actively trialing these digital currencies. For instance, Kyrgyzstan confirmed its intent to launch a CBDC in October, while the European Central Bank has progressed to the next phase of its digital euro project.

Despite the widespread experimentation, only three CBDCs have gone live as confirmed by the Atlantic Council, a U.S.-based think tank. Their CBDC tracker identifies Nigeria, the Bahamas, and Jamaica as the only nations with an active CBDC token at the moment, with another 49 countries in various stages of pilot testing.