UAE completes first payment with the digital dirham

mBridge is an experimental blockchain platform for cross‑border wholesale‑CBDC payments developed by the BIS Innovation Hub together with the central banks of Hong Kong, the UAE, China, and Thailand. It uses direct connectivity to central‑bank nodes and lets participants issue and redeem digital currencies to settle without long correspondent chains. In 2024 the initiative reached the MVP (minimum viable product) stage, and an early cross‑border test moved 50 million AED to China.

UAE authorities see the digital dirham as an additional layer on top of existing payment rails, a digital form of central‑bank money meant to enable near‑instant settlement and lower operating costs.

In its July brief, the Central Bank of the UAE outlined a phased rollout: start with payment‑focused functions, evaluate technology and regulatory risks, and only then integrate the platform into the country’s traditional financial system. The goal is not to displace banks but to complement them with a faster clearing instrument.

The pilot involves the central banks of the UAE, China, Hong Kong, and Thailand, building a shared layer for cross‑border settlements using national digital currencies.

In parallel, private‑sector tools are emerging that complement state programs. In 2023, DRAM launched as a stablecoin pegged to the UAE dirham and backed by AED reserves. Taken together, these moves show that the Emirates are serious about the digital economy: a CBDC is being tested in the public sector while commercial use cases of dirham‑based digital assets are growing.

For government agencies, mBridge is a real‑world test of speed and resilience. Banks can assess how their existing systems interoperate with a DLT platform. The biggest beneficiaries could be large enterprises that want round‑the‑clock payments without long delays.

Specific scaling parameters still depend on pilot results: the regulator needs to collect telemetry, validate compliance models, and fine‑tune access‑control procedures. The test will be judged not by single transfers but by how quickly the digital dirham finds its place in everyday business payments: supplier invoices, contractor settlements, taxes, and interagency transfers.