The United Arab Emirates is set to launch its Digital Dirham CBDC for retail use by late 2025, joining a growing list of countries exploring central bank digital currencies.
As originally reported by the Khaleej Times, the Central Bank of the UAE will issue the digital version of the country’s national currency AED for the retail sector in the last quarter of 2025. The Digital Dirham CBDC will be accepted across all payment channels alongside physical currency and will be accessible through licensed financial institutions, including banks, exchange houses, and fintech firms. It will feature high security, tokenization, and smart contract integration, enabling instant settlements and multi-party transactions.
Additionally, CBUAE has developed an integrated Digital Dirham platform and wallet, which enable retail, wholesale, and cross-border transactions.
The news follows a rebranding of the Digital Dirham, with its first letter now serving as the international symbol.
The UAE’s journey toward a digital currency began in June 2024 with the rollout of a stablecoin regulatory framework, establishing licensing guidelines for dirham-backed stablecoins. This triggered several major initiatives, including a push from Tether (USDT) to issue AED-backed tokens.
However, the Digital Dirham CBDC marks a key evolution, one that goes beyond private-sector stablecoins. As a sovereign-backed digital currency, it provides a higher level of security, regulatory oversight, and monetary authority than privately issued tokens.
In the CBDC space, the UAE has partnered with other countries, like Saudi Arabia, in the “Aber” project, a joint CBDC initiative between the two nations to explore cross-border payments using digital currencies.
Currently, the UAE is in the testing and development phase of its Digital Dirham, alongside a growing number of countries that are also running pilot programs of their own CBDCs, including Russia, China, Sweden, Korea, Brazil, and the United Kingdom, to name a few. The European Central Bank is also conducting a multi-year trial of the Digital Euro.
