Digital Dirham Pilot Brings UAE Closer to National CBDC Launch

The United Arab Emirates has officially completed its first Digital Dirham transaction, marking a major step forward in the country’s central bank digital currency (CBDC) project.

The Ministry of Finance and Dubai Finance announced that the transfer, processed through the mBridge cross-border payment platform, is part of the pilot rollout of the national digital currency. Officials described it as a milestone in the UAE’s effort to integrate the Digital Dirham into both public and private financial systems.

According to Ahmed Ali Meftah, executive director of central accounts at Dubai Finance, the trial aimed to test technical and operational readiness. The transaction reportedly settled in under two minutes, showcasing the system’s potential to accelerate payments and reduce settlement times between government institutions.

The UAE’s central bank first revealed plans for the Digital Dirham in March 2025, with an initial launch target for the fourth quarter of the year. A policy paper published in July outlined a phased rollout, beginning with payment-related functions only – a cautious approach designed to complement, rather than compete with, commercial bank deposits or savings products.

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Authorities have positioned the Digital Dirham as part of a broader modernization of monetary infrastructure, meant to “future-proof” the UAE’s economy for the digital age. Supporters argue that a CBDC could boost payment efficiency and expand access to financial services, while critics continue to warn about potential risks to privacy and banking stability.

Globally, CBDC development remains uneven. Data from the Atlantic Council’s tracker shows that only three nations – Nigeria, the Bahamas, and Jamaica – have fully launched their digital currencies, while nearly 50 others remain in pilot testing. The UAE now joins that group of frontrunners experimenting with government-backed digital money, positioning itself as one of the most technologically ambitious economies in the Middle East.