UAE completes first transaction using its ‘Digital Dirham’ CBDC

The United Arab Emirates has successfully completed the first transaction in its central bank digital currency (CBDC) pilot, marking the biggest milestone since the project was first announced in March. According to officials, the payment — carried out using the government-backed platform mBridge — was processed in under two minutes.

The UAE Ministry of Finance and Dubai Finance confirmed on Tuesday that the transaction was part of the pilot phase for the Digital Dirham and represents the first government use of the national digital currency. They described the achievement as an important step toward broader CBDC adoption across both government agencies and the private sector.

This is the first significant update since the UAE Central Bank said earlier this year that it expects the Digital Dirham to begin rolling out in the fourth quarter of 2025.

Test transaction completed in less than two minutes

Ahmed Ali Meftah, executive director of central accounts at Dubai Finance, said the payment was carried out to test technical readiness and ensure smooth integration with the Central Bank’s systems.

“The transaction was completed in less than two minutes,” he said, highlighting the CBDC’s potential to improve operational efficiency and speed up financial settlements between local and federal government entities.

Phased rollout ahead

In a policy paper released in July, the UAE Central Bank described the Digital Dirham as an effort to future-proof central bank money and respond to the growing demands of a digital economy. The rollout will happen in stages, and at launch the CBDC will only support payments. This limited feature set is intended to prevent the digital currency from competing with savings products or interest-earning financial services.

CBDCs remain a controversial topic globally. Critics worry they could erode privacy and disrupt the banking sector by enabling individuals to hold money directly with central banks. Supporters argue that CBDCs could make payments more efficient and expand financial inclusion.

Only three CBDCs have successfully launched worldwide

Although dozens of countries are exploring CBDCs, only three have officially launched so far, according to the Atlantic Council’s CBDC tracker: Nigeria, the Bahamas, and Jamaica. Another 49 nations — including Kyrgyzstan and members of the European Union — are currently in the pilot stage.

With the successful test of the Digital Dirham, the UAE moves one step closer to joining that list.