The United Arab Emirates is set to launch its digital dirham for retail use by late 2025, joining a growing list of countries exploring central bank digital currencies.
Digital Dirham Implementation
As reported by local media, the Central Bank of the UAE will issue the digital version of the country’s national currency AED for the retail sector in the last quarter of 2025. The Digital Dirham will be accepted across all payment channels alongside physical currency and will be accessible through licensed financial institutions, including banks, exchange houses, and fintech firms.
Integration and Capabilities of the New Currency
The Digital Dirham will feature high security, tokenization, and smart contract integration, enabling instant settlements and multi-party transactions. Additionally, the CBUAE has developed an integrated Digital Dirham platform and wallet, which enable retail, wholesale, and cross-border transactions.
Global Initiatives and Partnerships
The UAE's Digital Dirham project is part of a broader initiative, the 'Aber' project, a joint CBDC initiative between the UAE and Saudi Arabia to explore cross-border payments using digital currencies. As of today, the UAE is in the testing and development phase of its Digital Dirham, alongside several other countries running pilot programs for their CBDCs, including Russia, China, Sweden, Korea, and Brazil.
The launch of the Digital Dirham in the UAE represents a significant milestone in the development of central bank digital currencies, highlighting the country's commitment to innovation and financial system security.
