In Brief
- UAE completes first Digital Dirham CBDC transaction through mBridge platform.
- Transaction settled in under two minutes, showcasing system efficiency.
- Central Bank plans phased rollout, starting with payment functions only.
The UAE Ministry of Finance and Dubai Finance announced the successful completion of the first transaction using the Digital Dirham. The transaction, conducted through the mBridge platform, is part of the pilot phase of the UAE’s central bank digital currency (CBDC) initiative.
Officials called the transaction a significant step toward integrating the Digital Dirham into government and private sector operations. The transaction reportedly settled in under two minutes, demonstrating the system’s capability to expedite payments and streamline intergovernmental settlements.
According to Ahmed Ali Meftah, Executive Director of Central Accounts at Dubai Finance, the trial aimed to test technical readiness and operational integration with the central bank’s system. Meftah noted that the quick settlement showcased the potential for faster payment processes across government institutions.
The UAE Central Bank plans a phased rollout for the Digital Dirham, initially limiting its functions to payment purposes only. This approach avoids direct competition with traditional savings or interest-bearing products, providing a cautious but forward-looking integration of CBDC into the UAE’s economy.
UAE Joins Global Effort to Modernize Payment Systems
The UAE’s introduction of the Digital Dirham positions it as a leader in CBDC innovation in the Middle East. The initiative is seen as an effort to “future-proof” the UAE’s economy in the digital age.
Supporters argue that the CBDC could improve payment efficiency and increase financial inclusion. However, critics continue to voice concerns over privacy issues and the potential risks to banking stability.
Globally, CBDC development remains uneven, with only three countries Nigeria, the Bahamas, and Jamaica, having fully launched digital currencies. The UAE is now among nearly 50 countries experimenting with CBDCs, joining a growing global trend.
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Source: https://coincu.com/news/uae-successfully-completes-first-digital/
