The Central Bank of the UAE (CBUAE) has announced that it has been moving toward the rollout phase of its digital currency, the Digital Dirham.
The news follows the receipt of the technology and legal framework required to provide the Digital Dirham for everyday use. The central bank has underlined that the digital currency will be launched in phases, starting with a two-tier system in which the financial institution will issue and redeem Digital Dirhams to licensed financial organisations, which will then distribute them to users via wallet-based accounts. Transactions are set to be recorded on a permissioned distributed ledger, delivering both immutability and privacy through pseudonymous identifiers.
The CBUAE’s CBDC project
The current announcement comes after a series of pilots and cross-border trials. Initially, the UAE tested wholesale CBDC settlement with Saudi Arabia in Project Aber, from 2019 to 2020, before becoming a founding participant in the mBridge initiative conducted by the BIS Innovation Hub together with Hong Kong, China, and Thailand. In 2025, the CBUAE leveraged the platform to process a live cross-border payment in Digital Dirham.
When it comes to the domestic side of things, retail pilots trialled programmable use cases, such as targeted social benefit payments and a smart tourist wallet. Developed with G42 Cloud and blockchain company R3, the core issuance platform is currently live and integrated with the UAE’s banking network.
Furthermore, the CBUAE amended the central bank law to provide the Digital Dirham with complete legal tender status, enabling it to be treated similarly to cash and deposits. According to the central bank’s officials, the phased rollout will support the management of operational and cybersecurity risks while ensuring simplified integration with existing payment rails and future digital asset networks.
The country’s CBDC project comes as part of the central bank’s Financial Infrastructure Transformation programme, a broader strategy to modernise payments and financial market systems. If the launch goes as planned, the Digital Dirham could position the UAE among the first countries to conduct a national digital currency at scale for domestic and cross-border usage.
