The United Arab Emirates (UAE) has achieved a key milestone in its central bank digital currency (CBDC) project. The Digital Dirham pilot conducted its first-ever transaction, completed in under two minutes, marking a major step toward the country’s transition to a digital economy. This is the first major update to the project since its launch in March this year.

First transaction via the mBridge platform

According to the UAE Ministry of Finance and Dubai Finance, the test transaction was executed through the mBridge platform, which connects multiple central banks’ payment systems. It was the first government payment of its kind in the UAE, aiming to test the system’s operational readiness and technical integration with the central bank.

“The transaction tested operational readiness and ensured seamless technical integration with the central bank systems,” said Ahmed Ali Meftah, Executive Director of Central Accounts at Dubai Finance.

Gradual rollout from 2025

The UAE Central Bank plans to roll out the digital dirham in the fourth quarter of 2025. According to a July report, the process will be phased, with the initial stage limited to payment functions to avoid competing with commercial banks’ savings and interest-bearing products.

The bank described the project as a step toward modernizing the financial system and preparing central bank money for the digital era.

CBDCs: efficiency vs. privacy

CBDCs have sparked global debate. Proponents highlight faster, cheaper, and more secure payments, as well as improved financial inclusion. Critics warn of privacy concerns and potential disruption to traditional banking, as users could hold accounts directly with central banks. The UAE now joins a growing list of countries exploring or piloting CBDC technology.

Only three fully operational CBDCs

According to the Atlantic Council, only three CBDCs are currently operational — in Nigeria, the Bahamas, and Jamaica. Another 49 countries, including the UAE, are testing or piloting similar projects.

Kyrgyzstan recently announced plans for its own digital currency, while the European Central Bank has moved into the next phase of developing the digital euro.

Shaping the future of digital finance

The successful first transaction of the Digital Dirham confirms the UAE’s ambition to become a pioneer in state-backed digital currencies. If the rollout succeeds, the country could become one of the first in the Gulf region to use a central bank digital currency in everyday public and private payments.

Sources:

https://mediaoffice.ae/en/news/2025/november/11-11/ministry-of-finance-and-dubai-finance-conduct-first-government-transaction-using-digital-dirham?utm

https://www.centralbank.ae/media/lczb23l4/cbdc-short-report_july.pdf?utm

https://www.atlanticcouncil.org/cbdctracker/