The United Arab Emirates conducted the first transaction using its central bank digital currency, Digital Dirham, marking a milestone in the project announced in March. The pilot phase transaction used the mBridge government payment platform, signaling a step towards broader adoption across government and private sectors. The rollout is expected to begin in the fourth quarter of 2025.

Dubai Finance’s executive director confirmed that the test transaction for the Digital Dirham took less than two minutes, showcasing the goal of enhancing operational efficiency and expediting financial settlements. The successful test aimed to ensure seamless technical integration with the Central Bank’s systems.

The UAE Central Bank released a policy paper in July outlining the phased rollout of the CBDC, focusing initially on payment features to avoid competition with other financial products. Critics raise concerns about privacy infringement and the impact on the financial sector, while advocates highlight the potential for improved payment efficiency and financial inclusion.

Governments worldwide are exploring CBDCs, with Kyrgyzstan planning to issue its digital currency and the European Central Bank advancing its digital euro project. Only three countries have officially launched CBDCs – Nigeria, the Bahamas, and Jamaica, according to the Atlantic Council. Another 49 countries are in the pilot phase, indicating a global trend towards central bank digital currencies.

Read more at Cointelegraph: UAE Completes First Digital Dirham Transaction in CBDC Pilot