UAE Completes First Government Transaction Using Digital Dirham
The United Arab Emirates completed its first government-to-government transaction using the Digital Dirham CBDC. This milestone involved the Ministry of Finance and Dubai’s Department of Finance. The payment was processed through the mBridge platform and took less than two minutes. The Central Bank of the UAE says this pilot shows the country is ready for large-scale CBDC adoption.
Significance of the Transaction
- The Digital Dirham enables instant settlements between federal and local entities.
- It reduces costs, improves transparency, and removes intermediaries.
- Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum called the transaction a “pivotal milestone” for government financial transformation.
- The pilot is part of the Central Bank’s Financial Infrastructure Transformation program.
The UAE’s first phase also includes cross-border pilots with India. The country fully participates in mBridge, a multi-CBDC network for faster trade settlements.
Developing a Secure Digital Economy
The Central Bank of the UAE launched its CBDC strategy in 2023. It partnered with R3 and G42 Cloud to build a scalable and secure digital currency system. The Digital Dirham aims to enhance payments, increase system resilience, and prepare for a tokenized economy.
Sheikh Mansour bin Zayed Al Nahyan, Vice President and Chairman of the Central Bank, called the Digital Dirham a “strategic pillar” of the nation’s digital economy. The Central Bank plans to extend CBDC usage in commerce, banking, and trade.
UAE’s Broader Digital Asset Strategy
- The UAE joined the OECD’s Crypto-Asset Reporting Framework in September 2025, committing to share crypto tax data globally by 2028.
- The country is the fourth-largest Bitcoin holder, with about 6,333 BTC worth $740 million, mined by government-backed Citadel Mining.
- This reflects the UAE’s focus on building digital asset infrastructure rather than speculation.
The first live use of the Digital Dirham shows CBDCs moving from theory to real-world use. The UAE is turning blockchain-backed payments into critical infrastructure. The mBridge platform connects regional economies while preserving national control and financial stability.
