UAE Makes First CBDC Payment with Digital Dirham via mBridge System

TLDR

• UAE successfully completes its first government payment using the Digital Dirham via mBridge platform.
• The payment was completed in under two minutes, showcasing the efficiency of the Digital Dirham system.
• The mBridge platform eliminates intermediaries, streamlining government payments for enhanced security.
• The UAE had previously tested Digital Dirham in international operations, such as the Dh50 million payment to China.
• The Digital Dirham initiative supports the UAE’s goal to modernize its financial infrastructure and improve payments.

The United Arab Emirates has successfully completed its first government payment using the Digital Dirham, the nation’s central bank digital currency (CBDC). This transaction, carried out by the Ministry of Finance and the Dubai Department of Finance, marks a significant step in integrating digital currencies into national financial operations. The payment was completed in under two minutes, demonstrating the efficiency and speed of the new system.

A Key Milestone for the Digital Dirham Initiative

This payment represents a critical moment in the UAE’s Digital Dirham initiative, which is part of the country’s broader Financial Infrastructure Transformation Programme. The UAE Central Bank (CBUAE) developed the mBridge platform to facilitate government payments using CBDCs. The operation successfully connected the Dubai Department of Finance and federal authorities, using a new technical infrastructure that eliminates the need for intermediaries.

The UAE had previously tested the Digital Dirham in international operations. In January 2024, the country conducted a cross-border payment of Dh50 million to China. This pilot, executed via the mBridge platform, involved collaboration with Chinese, Hong Kong, and Thai authorities. It served as a test of CBDC capabilities for secure, immediate international settlements. These tests validated that CBDCs could be used for cross-border payments without intermediaries, offering a glimpse into future digital payment systems.

Streamlined Government Payments Without Intermediaries

The mBridge system allowed the UAE to complete the latest government payment smoothly and quickly. The system’s ability to execute settlements without intermediaries helped ensure that the transaction was both secure and efficient. Ahmed Ali Meftah, Executive Director of the Central Accounts Sector at the Dubai Department of Finance, confirmed the operation’s success, noting that the transaction was completed seamlessly in less than two minutes.

The UAE’s CBDC initiative is a key component of the country’s drive to modernize its financial infrastructure. Authorities have emphasized that integrating the Digital Dirham into government operations aligns with their vision to improve national payment systems and expand financial access. The initiative aims to position the UAE as a leader in financial innovation while reinforcing its financial ecosystem both domestically and internationally.

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