The UAE completes the first transaction of the CDBC "Digital Dirham," with the government accelerating comprehensive digital payment innovation.

The United Arab Emirates has completed its first government payment using digital Dirham, settling in under two minutes, enhancing efficiency and transparency, and solidifying its position as a leader in global fintech. (Background: UAE launches “Financial Influencer” license! Regulating what FinFluencers can do with digital financial content) (Additional context: Major announcement from UAE: Cryptocurrency transactions are exempt from VAT! A significant boon for local investments) The UAE is pushing digitalization amid desert heat, reaching a milestone on November 11, 2025: the Ministry of Finance and Dubai Finance Department executed their first intergovernmental transaction using the central bank digital currency “Digital Dirham.” The process from command issuance to fund settlement took less than two minutes, signaling a move toward fully digital official payments. First Government Transaction: Completed in Two Minutes According to official sources, while the transaction amount was not disclosed, the process was far more transparent than traditional interdepartmental transfers. The Central Bank first minted an equivalent amount of digital Dirhams on the mBridge platform, then transferred funds from the Ministry of Finance wallet to the Dubai Finance Department wallet, resulting in a timestamped, tamper-proof record. The official description of “less than two minutes” contrasts sharply with the hours or days typically required for reconciliation. mBridge Effectiveness: Efficiency and Transparency The mBridge platform features a “no intermediary” architecture, enabling simultaneous clearing and settlement on a single ledger, which shortens processing time and reduces operational costs. The system can automatically balance the general ledger, allowing finance personnel to monitor cash flows in real-time and avoid multiple entries and reconciliation errors. Currently, testing is limited to government agencies, but the Central Bank indicates this mechanism will eventually extend to public procurement and subsidy disbursements, adding traceability to accounting processes. Phased Implementation: Legal and International Cooperation in Tandem The UAE has adopted a “payment-first” approach. The Central Bank states that digital Dirham is expected to be available for broader use in Q4 2025, initially focusing on transaction functions and avoiding direct exposure to savings and credit products. Regarding legal frameworks, Al Tamimi & Company law firm notes that a federal decree effective September 16, 2025, has expanded the concept of “currency” to include digital forms, clearing concerns over large-scale CBDC circulation. On the cross-border front, the UAE is participating with Thailand, Hong Kong, and Saudi Arabia in the mBridge multi-currency settlement project, aiming to halve cross-border payment costs; it has also signed a memorandum of understanding with Turkey to exchange technical expertise. Challenges and Insights: From Desert Pilot to Global Stage The digital Dirham has demonstrated efficiency in a short period, but nationwide adoption still faces challenges, including user acceptance of new wallets, interoperability testing between different systems, and layered cybersecurity measures. From a global perspective, data from the Atlantic Council shows that only a few countries—such as Nigeria, The Bahamas, and Jamaica—are officially operating CBDCs, making the UAE’s progress particularly noteworthy. Investors and financial industry players who understand early on how CBDCs impact payments, liquidity, and regulation will be better prepared for upcoming changes in financial infrastructure. While the journey from pilot to widespread adoption may not be smooth, the two-minute transaction completed yesterday proves the feasibility of this initiative. Like the bright sunrise over the desert, the digital Dirham is bringing efficiency and transparency into government finance; as more countries join the CBDC movement, the global payments landscape is poised for a new order. Related Reports UAE Launches Tokenized US Treasury Fund Realize T-BILLS Fund: First issuance of IOTA and ETH, entering the RWA market UAE to Introduce “DAO-specific Law”: Small-scale banks can open accounts with a minimum cost of 3,000 MOP How to Use Cryptocurrency to Buy Flights? Travala’s Simple Demo, Emirates Airlines Opens Official Website for Ticket Booking [UAE completes first CBDC “Digital Dirham” transaction, accelerating comprehensive digital payment innovation] This article was originally published on BlockTempo, a leading blockchain news media outlet.