UAE’s First Digital Dirham Payment: Fast Guide
The United Arab Emirates has completed its first government transaction using the Digital Dirham, marking a concrete step from policy papers to real-world use. The payment—executed by the Ministry of Finance and Dubai’s Department of Finance with support from the Central Bank of the UAE (CBUAE)—settled in under two minutes, according to official statements and media briefings.
This milestone sits inside the CBUAE’s Financial Infrastructure Transformation (FIT) Programme and uses mBridge, a multi-central bank platform for cross-border and domestic settlement built with participating monetary authorities over the past several years.
What exactly happened
Officials described the transfer as the first government-level transaction using the Digital Dirham in the pilot phase. The UAE Government Media Office framed it as a “pioneering model of corporate integration,” signaling that ministries and emirate-level agencies can actually send and receive CBDC payments end-to-end. The headline stat—sub-two-minute completion—is meant to showcase the system’s speed compared with traditional rails.
Local business press echoed the point: the UAE has been methodically moving from small-scale testnets to live pilot transactions, and this is the first time a government payment has cleared in production for the Digital Dirham. Gulf News and other regional outlets noted it as a “major milestone” in the country’s transition toward a more fully digital economy.
What is the Digital Dirham?
The Digital Dirham is the UAE’s central bank digital currency (CBDC)—a state-issued, programmable form of money that can move across banks, businesses, and (eventually) consumers with finality and auditability. In a July 2025 policy paper, the CBUAE outlined design choices, risk mitigations, and phased rollout plans for retail, wholesale, and cross-border use cases—making clear that the CBDC is meant to complement, not replace, cash and existing electronic payment systems.
The same paper maps CBDC benefits to practical outcomes: lower transaction costs, instant settlement, and broader financial inclusion when paired with compliant access channels (e.g., bank and fintech front ends). Subsequent reporting in the local press has discussed how a digitized dirham could support salaries, everyday payments, and government disbursements, subject to legal and supervisory guardrails.
Why mBridge is central to the story
The mBridge platform—co-developed by several central banks with the BIS Innovation Hub during earlier stages—aims to make cross-border payments faster and cheaper by settling on a multi-CBDC ledger. BIS documentation shows mBridge reached a minimum viable product stage in 2024 after a series of pilots and invited more jurisdictions to participate. Even after the BIS stepped back from day-to-day involvement in late 2024, the platform continued under the control of participating central banks, including the UAE.
The UAE’s decision to route its first government CBDC payment through mBridge underscores a priority that’s bigger than a single domestic pilot: the country wants interoperable settlement with partners in Asia and the Gulf, not just a national e-money clone.
What changes for banks, merchants, and residents?
For banks and PSPs:
- The pilot shows operational readiness to originate and receive CBDC transactions via official government channels. Expect more tests around treasury operations, supplier payments, and inter-agency transfers before commercial banks roll out customer-facing flows at scale.
For merchants and government vendors:
- Faster government settlement could eventually trim days of receivables into minutes, depending on how quickly PSPs integrate CBDC rails alongside cards, account-to-account (A2A) payments, and existing instant schemes.
For residents and workers:
- The CBUAE’s policy roadmap points to retail possibilities over time (e.g., salary payments, bill pay, peer-to-peer), but today’s move is a government-to-business proof point, not a public rollout. Any consumer launch will follow additional testing, rulemaking, and wallet/on-ramp readiness.
Why this pilot drew global attention
Two reasons. First, it’s government-grade: real money, real agencies, and a hard metric—under two minutes—not just a lab test. Second, it’s about policy leadership. The UAE joins a small club of jurisdictions running live CBDC transactions in government workflows while also participating in multi-CBDC networks. That combination positions the country as a test bed for how public money can move across borders without relying solely on legacy correspondent banking.
Conclusion
The UAE’s first Digital Dirham government payment is more than a press release—it’s a production-grade validation that the CBDC stack (policy, tech, and operations) can move real value quickly. From here, watch three signals: 1) more government-to-business flows, 2) bank integrations that let corporates plug in, and 3) a measured path to retail pilots once rules, wallets, and vendors are ready. If those pieces fall into place, the Digital Dirham could shift from a promising concept to an everyday tool—fast, programmable, and globally interoperable by design.