The UAE Digital Dirham Completes Its First Transaction in Less Than 2 Minutes

The United Arab Emirates has just reached a crucial milestone: the Digital Dirham, its central bank digital currency (CBDC), successfully processed its first transaction in a record time of less than 2 minutes.

What Happened?

The Ministry of Finance and Dubai Finance jointly executed the transaction through the government payment platform mBridge. According to Ahmed Ali Meftah, Executive Director of Central Accounts at Dubai Finance, the trial was designed to validate the seamless technical integration between the Ministry's systems and the Central Bank.

The important thing here: 2 minutes settlement. For context, traditional interbank transfers usually take between 1-3 business days. This demonstrates the potential of the Digital Dirham to reduce transaction costs, accelerate payments between government entities, and lay the groundwork for instant cross-border settlements.

Phase Deployment Strategy

The Central Bank of the UAE is not going to launch everything at once. The plan is gradual:

• Phase 1: Payment functionalities (the current)
• Next: Expansion to federal and local entities
• Future: Inclusion of the private sector
• National launch: Expected by the end of 2025

Why It Matters

The Digital Dirham is part of the Financial Infrastructure Transformation (FIT) program of the UAE, which aims to modernize the country's financial infrastructure for the digital age. The goals are clear: improve financial inclusion, reduce settlement risks, and strengthen regional leadership in digital finance.

In other words, the UAE is positioning itself as a leader in CBDC adoption in the Middle East, while testing technology that could eventually revolutionize how intergovernmental payments work globally.