The United Arab Emirates has officially entered the race for central bank digital currencies (CBDCs), completing its first live test of the Digital Dirham. This pivotal moment occurred this week when a government transfer was executed using the digital currency, with reports indicating that the transaction settled in under two minutes. This signifies a major advancement in the nation’s ongoing pilot program.
The transaction was a collaboration involving the Central Bank of the UAE, the Ministry of Finance, and the Dubai Department of Finance. Utilizing the mBridge platform—an innovative system designed to connect multiple CBDCs—the operation was limited to federal and Dubai entities, not extending to the banking sector or the public at this stage.
The speed of the transaction has been highlighted as an indicator of the UAE’s technical readiness for the future of digital finance. According to reports, the transaction was executed swiftly, showcasing the capabilities of the mBridge platform.
Today, the Ministry of Finance & Dubai Finance marked a pivotal milestone in the history of government financial transformation in the UAE, as we executed the first government transaction using the Digital Dirham issued by the Central Bank of the UAE, representing the future of the… pic.twitter.com/gYRiTC1Euh
— Maktoum Bin Mohammed (@MaktoumMohammed) November 11, 2025
Using mBridge, which aims to enhance interoperability among various central banks, the UAE’s choice reflects a broader vision of connecting financial ecosystems beyond its borders. With experts suggesting that the model could simplify interbank settlements, this pilot is more than just a domestic trial; it marks a significant operational step forward.
The pilot itself is deliberately narrow, focusing primarily on transactions between government accounts and the mechanisms of recording settlements. Authorities closely monitored the process to ensure that transaction speed, finality, and overall system stability met their standards. Notably absent from this phase were retail wallets and merchant participation, indicating a cautious approach to rolling out the Digital Dirham.
Looking ahead, the Central Bank of the UAE has indicated plans for a phased rollout. If initial benchmarks are met, broader use could potentially emerge by Q4 of 2025, expanding to include private banks, merchant acceptance, and consumer wallets in future phases. However, meaningful discussions around privacy, cybersecurity, and the coexistence of CBDCs with traditional bank deposits will be crucial to shaping the program’s trajectory.
The introduction of the Digital Dirham could not only enhance the efficiency of government transactions but could also lay the groundwork for the UAE to become a competitive player in the evolving landscape of digital currencies.
Featured image from Manara Magazine, chart from TradingView
