The UAE completes its first-ever government transaction using the Digital Dirham in less than two minutes.
Published: 14 Nov 2025 | By Calm Gulf Life Blog
The United Arab Emirates has officially written a new chapter in global financial history. In a groundbreaking moment, the UAE completed its first government transaction using the Digital Dirham — a Central Bank Digital Currency (CBDC) developed by the Central Bank of the UAE (CBUAE). The entire payment was settled in under two minutes, marking a major milestone in the country’s ambitious digital transformation journey. This achievement places the UAE among the world’s most advanced nations in CBDC development and implementation.
What Actually Happened?
The Ministry of Finance (MoF) and Dubai’s Department of Finance carried out the nation’s first government-to-government transaction using the Digital Dirham. This was executed through the CBUAE’s advanced Financial Infrastructure Transformation (FIT) Programme. The entire process — authentication, transfer, approval, and settlement — was completed in less than two minutes, proving the system’s speed, accuracy, and trustworthiness.
This transaction is not a test or simulation. It is a real, legally recognized payment using a legally recognized digital currency backed by the UAE government. This marks the beginning of a new era for public financial operations.
Key Highlights
- The first government transaction using Digital Dirham successfully executed.
- Transaction completed in under two minutes.
- UAE becomes one of the first countries to execute real CBDC payments within government systems.
- Fully backed and recognized under new UAE monetary regulations.
- Part of UAE’s wider digital economy strategy.
Why This Breakthrough Matters
The adoption of the Digital Dirham is not just a technological upgrade. It represents a fundamental shift in how governments, businesses, and individuals will handle money in the future. CBDCs are set to become the backbone of modern digital economies, ensuring faster, safer, and more efficient transactions.
By successfully executing its first official CBDC transaction, the UAE has demonstrated its readiness to lead the world in financial innovation and digital transformation. This move also aligns with broader trends in countries like China, India, and Europe, which are testing or launching their own digital currencies.
- Instant and secure government payments.
- Reduced transaction costs and errors.
- Greater transparency and improved financial control.
- Foundation for future public and consumer Digital Dirham wallets.
What Is the Digital Dirham?
The UAE has introduced the Digital Dirham as its fully regulated Central Bank Digital Currency. It is not a cryptocurrency. It is a fully regulated digital form of the UAE Dirham issued directly by the Central Bank. This makes it:
- Stable in value
- Government-backed
- Legally equivalent to cash
- Faster and more secure than traditional payments
Unlike cryptocurrencies like Bitcoin or Ethereum, CBDCs like the Digital Dirham do not fluctuate in price. They are meant for everyday use — from receiving salaries to paying bills to sending money internationally.
The Technology Behind Digital Dirham
The Digital Dirham is built using highly secure distributed ledger technology (DLT). This ensures:
- Real-time settlement without delays
- Tamper-proof transactions
- Lower risk of fraud
- Full transparency between authorities
The UAE is also part of Project mBridge — a multi-country blockchain payment network created by Hong Kong, China, Thailand, and the UAE. This allows Digital Dirham to be used for future cross-border payments.
The Digital Dirham utilizes advanced blockchain ledger technology.
The New Digital Dirham Law (Decree No. 6 of 2025)
One of the most important and less-known facts is that the UAE passed a legal framework recognizing Digital Dirham as official money. Under **Federal Decree-Law No. 6 of 2025**, the Digital Dirham is now legally equal to:
- Cash (physical notes)
- Bank balances
- Electronic money
This means merchants, banks, and institutions will eventually be required to accept Digital Dirham as a valid form of payment. It also ensures complete regulatory clarity before the public launch.
What This Means for Residents and Expats
For millions living and working in the UAE, this breakthrough has several long-term benefits. Over time, individuals will be able to hold Digital Dirham in official wallets and use it for daily transactions such as:
- Shopping at malls and supermarkets
- Paying utility bills
- Receiving government refunds and benefits
- Sending international remittances
- Salary transfers
For expatriates, the biggest improvement may come in the remittance sector, as mBridge aims to reduce the cost and time of sending money to home countries.
Impact on Businesses and Government
The Digital Dirham will simplify operations for private companies, government entities, and financial institutions. It will enable:
- Instant invoice settlements
- Faster supplier payments
- Lower banking fees
- Reduced fraud and financial risks
- Improved bookkeeping and auditing
Government departments will also save time and money due to automated settlement systems built around blockchain technology.
When Will Digital Dirham Be Available for Everyone?
The public rollout of Digital Dirham is expected in phases. After successful government transactions, the next stages include:
- Pilot programs with selected banks
- Business wallet trials
- Consumer digital wallet launch
- Full retail adoption across the UAE
Experts expect citizens and residents to begin using Digital Dirham wallets within the next 1–2 years, depending on infrastructure readiness.
The UAE completes its first-ever government transaction using the Digital Dirham in under two minutes, marking a historic leap towards a fully digital financial future.
Who Benefits the Most?
Everyone stands to gain — from ordinary shoppers to global exporters. However, the biggest winners will be:
- Expats sending international remittances
- Small and medium-sized businesses
- Online merchants and e-commerce shops
- Government institutions
- Banks adopting advanced digital systems
Final Thoughts
The UAE has once again shown the world why it stands at the forefront of innovation. Completing the first-ever government payment through the Digital Dirham is more than a technological achievement — it is a declaration that the future of money has arrived. With improved speed, security, transparency, and global interoperability, the Digital Dirham will transform how people and businesses interact with money in the coming years.
As the UAE continues to lead the region in digital transformation, residents and businesses can look forward to a smarter, faster, and more secure financial ecosystem. We’re just getting started, and the most exciting progress is still ahead.
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