The UAE has planned to launch Digital Dirham in phases, according to a report published by CBUAE (the Central Bank of UAE).
The Digital Dirham is a digital alternative to physical money, and it will allow individuals to use it for a wide range of purposes, including online payments, in-store purchases, commercial and P2P transactions.
Gradually rolling out the Digital Dirham
A platform was created to issue, trade, and use the Digital Dirham, which includes a digital wallet that enables businesses and individuals to conduct financial transactions. The digital currency is pegged to the physical Dirham, having the same value as the physical currency, but being stored in a blockchain-based form for security reasons.
The project began in 2019 and has now completed its first stage. Earlier this year, the CBUAE confirmed that the digital currency will be rolled out for the retail industry during the last quarter of 2025. In 2024, the CBUAE authorised the first Digital Dirham transaction abroad utilising the mBridge platform, a system designed with partners from China, Thailand, and Hong Kong to make cross-border payments faster and cost-effective.
Right before it was launched, the digital currency ran through experiments and tests for use cases. These included programmable government payments that can only be spent in approved places, tourist wallets with instant VAT refunds and easy currency exchange, fractional ownership of assets like property using tokenisation and parent-child wallets to teach financial responsibility with spending limits.
The Digital Dirham is part of the nation’s plan to modernise its financial system and make payments faster, secure, and easier to access for businesses and citizens. It will not earn interest, as the focus is on spending rather than saving. The CBUAE is committed to continuously working with local and international partners and organisations to make sure that a coordinated and gradual launch of the currency is made across the UAE and beyond in a compliant and safe manner.
