UAE's First Digital Dirham Transaction: A Strategic Move to Lead the Global Digital Economy

The United Arab Emirates has made history by executing its first government transaction using the Digital Dirham, the nation's central bank digital currency (CBDC), marking a significant milestone in its digital financial transformation. The transaction, processed via the mBridge platform in under two minutes, was conducted by the Ministry of Finance and the Dubai Department of Finance, signaling the UAE's commitment to leveraging blockchain technology for public sector efficiency, according to a Cryptopolitan report.

The mBridge platform, a collaborative initiative launched in 2021 between the BIS Innovation Hub, the Bank of Thailand, the Central Bank of the UAE (CBUAE), the Digital Currency Institute of the People's Bank of China, and the Hong Kong Monetary Authority, facilitated the transaction, as reported by the same Cryptopolitan report. Saudi Arabia's Central Bank joined the network in 2024, expanding regional participation in the multi-CBDC bridge, according to the same report. The UAE's pilot test aimed to verify operational readiness and ensure seamless integration with the CBUAE's systems, as highlighted by Ahmed Ali Meftah, Dubai Finance's executive director of central accounts. "The transaction underscores our goal of enhancing operational efficiency and expediting financial settlements between federal and local government entities," he stated, according to a Cointelegraph article.

High-level endorsements from UAE leadership further emphasized the initiative's strategic importance. H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Minister of Finance, hailed the move as a "pivotal milestone in the history of government financial transformation," underscoring its role in advancing transparency and efficiency, according to a Coinotag report. Similarly, Sheikh Mansour bin Zayed Al Nahyan, Chairman of the CBUAE, described the Digital Dirham as a "strategic pillar" in building an integrated digital economy, aligning with the UAE's vision to solidify its status as a global financial hub, as noted in the same Coinotag report.

The Digital Dirham's rollout is progressing in phases, with the initial focus on payments to avoid competing with interest-bearing financial products, as mentioned in the Cointelegraph article. The CBUAE announced in August 2025 its plans to launch the CBDC by year-end, enabling in-store and peer-to-peer transactions through a dedicated platform, including digital wallets, as reported by Cryptopolitan. The IMF also commended the UAE's progress in October 2025, noting its proactive approach to modernizing the AED Dirham framework and regulating stablecoins, according to the Cryptopolitan report.

Critics of CBDCs often raise concerns about privacy and financial sector disruption, but the UAE's phased approach aims to mitigate risks while fostering innovation. The CBUAE has developed a comprehensive platform for issuing, trading, and using the Digital Dirham, ensuring a structured transition to digital payments, as reported by Coinotag. With only three countries—Nigeria, the Bahamas, and Jamaica—having officially launched CBDCs, the UAE's initiative positions it as a regional leader in blockchain-driven financial infrastructure, according to a Bitget article.

As the Digital Dirham moves toward full public availability by year-end, its adoption could reshape both government and private sector transactions, reinforcing the UAE's ambition to lead in the digital economy. The successful pilot not only validates the potential of CBDCs but also highlights the UAE's proactive stance in aligning with global financial trends.