UAE conducts first national transaction using Digital Dirham, marking milestone in digital economy drive

The United Arab Emirates has completed its first government transaction using the Digital Dirham, marking a major step in the country’s push toward a fully integrated digital economy.

The pilot transaction was carried out jointly by the Ministry of Finance and the Dubai Department of Finance, in coordination with the Central Bank of the UAE (CBUAE), the authorities announced on Tuesday.

According to Ahmed Ali Meftah, executive director of the central accounts sector at the Department of Finance, the transfer was executed through mBridge, a multi-central bank digital currency (CBDC) platform developed by the CBUAE. 

The Digital Dirham forms part of the CBUAE’s Financial Infrastructure Transformation Programme, designed to enhance payment systems and advance the UAE’s position as a hub for financial innovation.

The Digital Dirham initiative aligns with the UAE’s broader digital asset and payments strategy, which includes developing regulatory frameworks for stablecoins and digital currencies. Launched in March 2023, the central bank’s strategy requires stablecoins to be fully backed by high-quality liquid assets and subject to independent audits.

In a related development, Abu Dhabi entities IHC, ADQ, and First Abu Dhabi Bank announced plans in April to issue a dirham-backed stablecoin under CBUAE supervision.

Analysts say the move reflects the UAE’s efforts to provide regulatory clarity and infrastructure that supports institutional adoption of digital assets, key factors that could strengthen its position as a leader in financial innovation across the region.