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The United Arab Emirates has completed its first government transaction using a central bank digital currency (CBDC), marking a significant step in its Digital Dirham project.
This test payment, made through the cross-border mBridge platform, confirms the UAE’s technical integration and signals readiness for wider government and private sector adoption of CBDCs.
The development is the first public update since the Central Bank’s March announcement that the Digital Dirham would begin rolling out in late 2025.
Today, 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
The payment was executed by the UAE Ministry of Finance and Dubai Finance as part of the CBDC’s ongoing pilot programme. The transaction took less than two minutes to complete.
According to Dubai Finance, the objective was to verify “operational readiness” and ensure smooth system integration between government entities and the Central Bank.
mBridge, the government payments platform used in this test, is designed for secure and efficient cross-border CBDC settlements.
The pilot confirmed its capability to facilitate real-time transactions between federal and local bodies. The UAE government called the test “a step towards broader adoption” of its digital currency infrastructure.
The Central Bank of the UAE clarified in a July policy paper that the digital currency will initially be restricted to payments.
This controlled scope aims to minimise risks associated with more complex financial products like interest-bearing accounts or savings mechanisms.
The phased launch is intended to allow gradual integration across sectors and monitor technical and regulatory impact before expanding functionality.
The paper described the initiative as an effort to “future-proof” the country’s monetary system and ensure it remains responsive to a fast-changing digital economy.
Globally, several governments are pursuing CBDCs, but very few have reached full implementation. As of now, only Nigeria, the Bahamas, and Jamaica have live, operational CBDC tokens, according to the Atlantic Council’s tracker.
Around 49 other nations, including the UAE, remain in the pilot phase.
Recent international developments mirror the UAE’s move. The European Central Bank has advanced to the next stage of its digital euro project, while Kyrgyzstan has announced plans to issue a national CBDC of its own.
These actions show growing momentum towards state-backed digital currencies, despite ongoing concerns around privacy, surveillance, and centralised financial control.
CBDCs continue to draw mixed responses from stakeholders. Advocates highlight their potential to improve transaction speed, enhance transparency, and increase financial inclusion.
However, critics argue that direct interaction between individuals and central banks could threaten commercial banking institutions and reduce financial privacy.
The UAE’s decision to restrict its initial CBDC use to basic payments appears designed to sidestep some of these concerns.
By excluding interest-earning features and savings products from the launch phase, the government aims to test the technology without destabilising existing financial systems.
As the country prepares for a broader rollout by Q4 2025, more phases of testing are expected. This first transaction demonstrates both progress and caution, positioning the UAE as a measured but ambitious player in the evolving CBDC space.
The post UAE tests 'digital dirham' with live transaction using mBridge platform appeared first on Invezz
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Share:
The United Arab Emirates has completed its first government transaction using a central bank digital currency (CBDC), marking a significant step in its Digital Dirham project.
This test payment, made through the cross-border mBridge platform, confirms the UAE’s technical integration and signals readiness for wider government and private sector adoption of CBDCs.
The development is the first public update since the Central Bank’s March announcement that the Digital Dirham would begin rolling out in late 2025.
Today, 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
The payment was executed by the UAE Ministry of Finance and Dubai Finance as part of the CBDC’s ongoing pilot programme. The transaction took less than two minutes to complete.
According to Dubai Finance, the objective was to verify “operational readiness” and ensure smooth system integration between government entities and the Central Bank.
mBridge, the government payments platform used in this test, is designed for secure and efficient cross-border CBDC settlements.
The pilot confirmed its capability to facilitate real-time transactions between federal and local bodies. The UAE government called the test “a step towards broader adoption” of its digital currency infrastructure.
The Central Bank of the UAE clarified in a July policy paper that the digital currency will initially be restricted to payments.
This controlled scope aims to minimise risks associated with more complex financial products like interest-bearing accounts or savings mechanisms.
The phased launch is intended to allow gradual integration across sectors and monitor technical and regulatory impact before expanding functionality.
The paper described the initiative as an effort to “future-proof” the country’s monetary system and ensure it remains responsive to a fast-changing digital economy.
Globally, several governments are pursuing CBDCs, but very few have reached full implementation. As of now, only Nigeria, the Bahamas, and Jamaica have live, operational CBDC tokens, according to the Atlantic Council’s tracker.
Around 49 other nations, including the UAE, remain in the pilot phase.
Recent international developments mirror the UAE’s move. The European Central Bank has advanced to the next stage of its digital euro project, while Kyrgyzstan has announced plans to issue a national CBDC of its own.
These actions show growing momentum towards state-backed digital currencies, despite ongoing concerns around privacy, surveillance, and centralised financial control.
CBDCs continue to draw mixed responses from stakeholders. Advocates highlight their potential to improve transaction speed, enhance transparency, and increase financial inclusion.
However, critics argue that direct interaction between individuals and central banks could threaten commercial banking institutions and reduce financial privacy.
The UAE’s decision to restrict its initial CBDC use to basic payments appears designed to sidestep some of these concerns.
By excluding interest-earning features and savings products from the launch phase, the government aims to test the technology without destabilising existing financial systems.
As the country prepares for a broader rollout by Q4 2025, more phases of testing are expected. This first transaction demonstrates both progress and caution, positioning the UAE as a measured but ambitious player in the evolving CBDC space.
The post UAE tests 'digital dirham' with live transaction using mBridge platform appeared first on Invezz
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