The United Arab Emirates Dirham digital-currency pilot achieved a major milestone this week, as the Ministry of Finance (UAE) and the Dubai Department of Finance used the new payment infrastructure in coordination with the Central Bank of the UAE (CBUAE) to initiate the country’s first government transaction via the “Digital Dirham”.
According to the announcement, the transaction was executed using the mBridge platform, a multilateral CBDC settlement system developed in collaboration with international-central-bank partners.
The payment was completed in under two minutes, per official commentary from Ahmed Ali Meftah, Executive Director of the Central Accounts Sector at Dubai’s Department of Finance.
The rapid settlement time underscores the UAE’s aim to boost operational efficiency, transparency and integration across its national financial ecosystem.
Bridging Global And Local
This government-transaction pilot comes after the UAE’s earlier use of the Digital Dirham for cross-border settlement. In January 2024, the UAE executed a payment to China through the same mBridge network, testing international use cases for the CBDC.
Now, by shifting to domestic government use, the UAE is advancing the Digital Dirham from experimental foreign corridors into operational public-sector infrastructure.
The move reflects a broader strategy within the central bank’s Financial Infrastructure Transformation Programme, which seeks to embed digital payments, open finance and next-gen identity systems across government and commerce.
UAE And Global Finance
For the UAE, the transaction signals seriousness behind its ambition to become a global hub for digital finance and fintech innovation. Officials described the Digital Dirham not just as a payment token but as a “strategic pillar” for an integrated digital economy.
On the international stage, this development adds to the growing momentum behind central-bank digital currencies (CBDCs). With only a handful of fully launched national digital currencies, the UAE’s progress underscores how governments are advancing beyond pilot phases into real-world deployment.
The implications are wide-ranging: faster and more cost-efficient financial flows, reduced reliance on intermediaries, improved fiscal transparency and stronger connectivity between domestic and cross-border rails.
For institutions and service providers, it signals that the infrastructure around digital currencies is shifting from theory into practice.
The UAE’s first government payment using the Digital Dirham represents a clear move from concept to execution in the evolution of national digital currencies.
As the pilot expands, attention will turn to how the system performs at scale, how it ensures security, and how it encourages adoption among both institutions and citizens.
The outcome could influence how other countries design their own digital currencies and how the global financial system adapts to a more connected, digital future.
