The United Arab Emirates is preparing to launch its Central Bank Digital Currency (CBDC), the Digital Dirham, in a move experts say will modernise the nation’s financial system and solidify its standing as a global hub for digital finance. The retail launch of the blockchain-based currency is anticipated in the final quarter of 2025.
According to analysts, the initiative is a key component of the UAE’s Digital Economy Strategy, which aims to double the digital economy’s contribution to the non-oil GDP to nearly 20 per cent by 2031. The Digital Dirham is expected to provide the Central Bank of the UAE (CBUAE) with greater control over monetary policy while also improving the ability to track illicit financial activities.
A Strategic Financial Overhaul
The CBUAE, the first central bank in the Arab region to introduce a CBDC, is developing the project with technology firms G42 Cloud and R3. Governor Khaled Mohamed Balama stated the programme represents a leap towards realising the central bank’s vision for a more resilient and inclusive financial system.
“It is anticipated that the Digital Dirham… shall substantially enhance financial stability, inclusion, resilience, and combatting financial crime,” Balama said. He added that it will enable new digital products and business models while reducing costs.
The new currency will support retail, wholesale, and cross-border payments. For consumers, this will mean faster, cheaper, and more secure transactions. For businesses, especially in trade finance, it promises to simplify international payments, a significant benefit for the UAE’s expatriate-heavy economy.
Vijay Valecha, Chief Investment Officer at Century Financial, noted that the digital currency is part of the country’s wider Financial Infrastructure Transformation programme. He explained that by promoting digital payments, it will help the UAE move towards a cashless society, making transactions more efficient.
New Symbol and Advanced Technology
In March 2025, the CBUAE unveiled a unique symbol for both the physical and digital dirham. The design features a large, encircled ‘D’ with two horizontal lines through its centre, signifying stability. Inspired by the national flag, its colours reinforce the currency’s national identity.
The system will leverage smart contracts to automate complex agreements and tokenisation to allow for fractional ownership of assets, which could increase market liquidity. A secure digital wallet has also been developed for individuals and businesses to manage the currency.
Experts believe the project will foster innovation in the fintech sector. Samer Hasn, a senior market analyst at XS.com, said the new symbols reflect the UAE’s commitment to cementing its position as a global financial hub. This sentiment was echoed by economist Dr Abdul Rahim Al Farhan, who highlighted the country’s flexible regulations and advanced digital infrastructure as key factors in attracting global investment in digital assets.