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The United Arab Emirates (UAE) has successfully completed its first government-to-government transaction using the Digital Dirham, the country’s central bank digital currency (CBDC), marking a major step in its national digital finance transformation.
Today, Ministry of Finance & Dubai Finance marked a pivotal milestone in the history of government financial transformation in the UAE, as we executed the first government transaction using the Digital Dirham issued by the Central Bank of the UAE, representing the future of the… pic.twitter.com/gYRiTC1Euh
— Maktoum Bin Mohammed (@MaktoumMohammed) November 11, 2025
According to an official joint statement from the UAE Ministry of Finance and the Dubai Department of Finance, the transaction was processed through the mBridge cross-border payment platform and settled in under two minutes , which is a record-breaking technical milestone for CBDC-based settlements.
Two-Minute Government Settlement Signals CBDC Readiness
The Central Bank of the UAE (CBUAE) first unveiled its Digital Dirham project in March 2025, aiming for rollout by Q4 2025. This latest test represents a critical technical and operational milestone confirming the system’s readiness for deployment.
Ahmed Ali Mehta, Executive Director of the Central Accounting Department at Dubai’s Finance Ministry, said the pilot was designed to verify the platform’s reliability before national implementation.
The UAE previously completed its first cross-border CBDC payment via mBridge in January 2024, in collaboration with the People’s Bank of China, Hong Kong Monetary Authority, Bank of Thailand, and the Bank for International Settlements (BIS) Innovation Hub, successfully transferring funds directly to China.
Core Pillar of UAE’s Financial Infrastructure Transformation Program
The transaction was part of the CBUAE’s Financial Infrastructure Transformation (FIT) program, a national initiative to accelerate digital payments adoption and enhance the UAE’s position as a global financial hub.
CBUAE Governor Khaled Mohamed Balama described the pilot as a “qualitative milestone in the UAE’s digital transformation journey.”
“The Digital Dirham represents our commitment to advancing the national payment system, strengthening financial stability, and positioning the UAE as a global leader in financial innovation and anti-financial crime frameworks,” Balama said.
He added that the blockchain-based Digital Dirham is expected to enhance stability, inclusion, resilience, and transparency across the financial ecosystem.
According to the UAE’s July 2025 policy paper, the CBDC rollout will follow a phased approach, initially focusing on wholesale payment functions rather than retail use, ensuring that it complements rather than competes with traditional bank deposits and savings products.
Interoperability and SME Inclusion Drive Future Strategy
The transaction, processed through the mBridge network, demonstrates CBDC interoperability for cross-border government payments. The platform, co-developed by the CBUAE, enables direct issuance, receipt, and settlement of payments between government entities without intermediaries.
By linking this domestic pilot to previous international CBDC collaborations, the UAE is signaling steady progress from global experimentation to official public finance implementation.
The Digital Dirham is designed with cross-border interoperability in mind, allowing small and medium-sized enterprises (SMEs) to participate more efficiently in global trade.
Furthermore, the UAE has established a clear regulatory framework ahead of the CBDC’s full launch, ensuring its status as legal tender and maintaining compliance and transparency to reduce uncertainty for both businesses and investors.
This proactive approach positions the UAE as a global frontrunner in the cryptocurrencies race, ahead of many developed economies still in early pilot stages.
