- UAE Ministry of Finance and Dubai Department of Finance execute first CBDC payment.
- Transaction completed in under two minutes without intermediaries involved.
- The move follows the January 2024 cross-border pilot that transferred Dh50 million to China.
The United Arab Emirates has executed its inaugural government financial operation utilizing the Digital Dirham central bank digital currency. The Dubai Department of Finance and Ministry of Finance conducted the payment alongside the Central Bank of the UAE.
Authorities called the operation advancing the integration of CBDC technology into national fiscal operations. The payment forms part of pilot activities for the Digital Dirham initiative, operating under the CBUAE’s Financial Infrastructure Transformation Programme.
International testing precedes domestic rollout
The program targets faster digital payment uptake, expanded financial access, and enhanced status as a global financial center. During January 2024, UAE authorities executed an international value transfer using Digital Dirham technology via the mBridge system, routing funds to Chinese recipients.
That experimental operation involved coordination with China’s monetary authorities, Hong Kong’s financial regulator, and Thailand’s central bank through the Bank for International Settlements Innovation Hub. The test validated that central bank digital currencies could facilitate protected, immediate international value settlements.
Vice President Sheikh Mansour bin Zayed Al Nahyan called the Digital Dirham fundamental to creating a comprehensive digital economic structure. He noted the intergovernmental payment between Dubai and federal authorities shows coordination among national fiscal frameworks and sophisticated technical foundations supporting economic expansion.
Technical infrastructure allows quick processing
The operation used mBridge, a governmental payments infrastructure created by the CBUAE for executing settlements through central bank digital currency. Connected to Digital Dirham systems, it permits unmediated issuance, acceptance, and completion of governmental payments.
Dubai Department of Finance’s Central Accounts Sector Executive Director Ahmed Ali Meftah explained the experimental operation evaluated operational preparedness and confirmed smooth technical connection with Central Bank infrastructure. The settlement concluded in under two minutes.
The mBridge infrastructure received initial international validation and now supports internal deployment for accelerated, reduced-cost, and more visible settlements. Authorities indicate alignment with digital economic objectives for modernizing fiscal infrastructure while maintaining regulatory standards.
The Digital Dirham constitutes a central element within the UAE’s Financial Infrastructure Transformation framework, including immediate payment systems, open finance structures, and improved digital identification mechanisms. Governor of the CBUAE Khaled Mohamed Balama described the pilot as advancing national payment infrastructure and reinforcing the financial ecosystem while building global leadership in financial innovation.
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Source: https://coinedition.com/uae-executes-first-government-payment-using-digital-dirham-via-mbridge-platform/
