The Central Bank of the UAE (CBUAE) has confirmed its plans to roll out the Digital Dirham as a Central Bank Digital Currency (CBDC) by the fourth quarter of 2025. As part of its Financial Infrastructure Transformation (FIT) programme, the CBUAE aims to modernize the financial ecosystem, enhance security, and optimize cross-border payments. The Digital Dirham will be supported by an integrated digital wallet, enabling secure and efficient transactions for individuals and businesses.
What is the Digital Dirham?
The Digital Dirham will be a blockchain-based digital currency that holds the same value as its physical counterpart, ensuring transparency and security. According to the CBUAE, the CBDC will reduce reliance on cash, improve financial inclusion, and offer cost-effective payment solutions for both domestic and international transactions.
To make the Digital Dirham widely accessible, it will be distributed through licensed financial institutions, including banks, fintech firms, and exchange houses. The CBUAE also introduced a new currency symbol, which will represent both the digital and traditional forms of the Dirham.
Key Features of the UAE’s CBDC
- Tokenization & Smart Contracts: The Digital Dirham will facilitate tokenization, allowing assets to be fractionalized for greater liquidity.
- Automated Transactions: Smart contracts will enable multi-party and multi-stage transactions, ensuring seamless automation of financial agreements.
- Security & Transparency: Transactions will be recorded on blockchain, minimizing financial fraud and ensuring compliance with international standards.
How Will the Digital Dirham Be Used?
Individuals and businesses will be able to use the Digital Dirham for:
✔ Retail payments
✔ Wholesale transactions
✔ Cross-border settlements
✔ Government transactions
Users can store and manage the CBDC via the upcoming government wallet, streamlining everyday financial activities.
UAE Joins the Global CBDC Race
With this announcement, the UAE joins a growing list of countries exploring CBDC adoption. Nations like India, China, South Korea, Brazil, and Iran have been conducting trials to implement digital fiat currencies within their financial systems.
The International Monetary Fund (IMF) has also proposed a CBDC framework to help countries accelerate CBDC deployment and adoption strategies.
The CBUAE believes that the Digital Dirham will strengthen financial stability, promote economic growth, and position the UAE as a leader in digital finance.
With a launch expected between October and December 2025, the UAE’s Digital Dirham could revolutionize the nation’s payment infrastructure, ushering in a cashless future.
