UAE Completes First Government Transaction Using Digital Dirham
UAE Makes History with First Government Transaction Using the Digital Dirham
The United Arab Emirates has successfully completed its first-ever government financial transaction using the Digital Dirham, signaling a groundbreaking moment in the country’s journey toward a fully digital economy. The transaction, carried out between the Ministry of Finance and the Dubai Department of Finance (DOF) in coordination with the Central Bank of the UAE (CBUAE), highlights the nation’s growing leadership in digital currency innovation and financial technology adoption.
This milestone follows the UAE’s earlier success with its cross-border payment pilot, where Dh50 million was transferred to China using the same digital currency platform. Together, these developments show that the Digital Dirham is moving from experimental stages to real-world implementation across government systems.
From Global Pilot to National Implementation
The Digital Dirham project forms part of the CBUAE’s Financial Infrastructure Transformation (FIT) Programme, which aims to accelerate the adoption of digital payments, strengthen financial inclusion, and position the UAE as a global financial hub.
The first successful cross-border payment using the Digital Dirham took place in January 2024 via the mBridge platform, in collaboration with the People’s Bank of China, Hong Kong Monetary Authority, and the Bank of Thailand, under the Bank for International Settlements Innovation Hub. That trial proved that central bank digital currencies (CBDCs) can enable secure, instantaneous international transactions without relying on intermediary banks.
Now, by completing a domestic government transaction, the UAE has transitioned from international testing to nationwide operational use, setting the stage for broader adoption across both public and private sectors.
A New Phase of Digital Transformation
Sheikh Mansour bin Zayed Al Nahyan, Vice President, Deputy Prime Minister, Chairman of the Presidential Court, and Chairman of the CBUAE, called the Digital Dirham “a strategic pillar in the UAE’s pursuit of an integrated digital economy.”
He emphasized that the first intergovernmental transaction reflects “a high level of integration across national financial systems and advanced digital infrastructure that supports long-term growth and stability.”
Echoing this, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, said the initiative demonstrates “the Ministry of Finance’s commitment to accelerating digital transformation in public finance management while promoting transparency and efficiency.”
He added that using the Digital Dirham strengthens the integration of the UAE’s national financial ecosystem and supports the leadership’s vision of building an innovative and trustworthy digital economy.
Financial Innovation at Work
Mohammed Hadi Al Husseini, Minister of State for Financial Affairs, described the Digital Dirham as “a qualitative leap in the use of financial technology.” He noted that collaboration between the Ministry of Finance, DOF, and CBUAE sets “a pioneering model for corporate and government integration, boosting global confidence in the UAE’s economy.”
Khaled Mohamed Balama, Governor of the CBUAE, called the achievement “a qualitative milestone in the UAE’s digital transformation journey.” He reaffirmed the Central Bank’s commitment to developing secure, efficient, and advanced national payment systems that enhance financial stability and global competitiveness.
“The Central Bank remains committed to developing cutting-edge financial solutions that align with global shifts,” Balama said. “We aim to reinforce the strength and resilience of our national economy while building a globally competitive digital ecosystem.”
The Technology Behind the Transaction
The transaction was conducted through mBridge, a government payment platform developed by the CBUAE to enable settlements using central bank digital currency. Integrated with the Digital Dirham system, it allows direct issuance, receipt, and settlement of payments—all without intermediaries.
According to Ahmed Ali Meftah, Executive Director of the Central Accounts Sector at the DOF, the pilot transaction was executed in less than two minutes, proving the system’s operational readiness and efficiency. He noted that it also confirmed the technical compatibility between federal and local government systems, streamlining the financial process.
Abdulrahman Saleh Al Saleh, Director General of DOF and Vice Chairman of the CBUAE, expressed gratitude to the UAE’s leadership, stating:
“The successful completion of this transaction reflects the high level of coordination between government entities and the Central Bank. It’s a testament to the UAE’s strong digital infrastructure and forward-thinking approach to financial innovation.”
Expanding the Digital Dirham’s Reach
Initially tested in international trade, the mBridge platform is now being used domestically to reduce transaction time and costs while ensuring full transparency. The move aligns with the UAE’s Digital Economy Strategy, which aims to modernize financial systems while maintaining cybersecurity and regulatory compliance.
The Digital Dirham is one of the key pillars of the UAE’s Financial Infrastructure Transformation (FIT) agenda, alongside:
Instant payment platforms
Open finance frameworks
Digital identity integration
By linking this domestic transaction to its earlier cross-border pilot, the UAE demonstrates a clear, strategic roadmap — from global pilot testing to national deployment. This not only boosts efficiency and security within the UAE’s financial operations but also strengthens the country’s international credibility as a leader in digital finance innovation.
A Vision for a Fully Digital Economy
As Sheikh Mansour stated, the Digital Dirham embodies the UAE’s “integrated approach to building a digital economy that champions transparency, innovation, and sustainability.”
The successful execution of this first government transaction signifies more than just technological progress — it represents a new era in how the UAE manages money, data, and trust. With continued investment in CBDC technology, the nation is positioning itself at the forefront of global financial transformation.