UAE is poised to introduce its Digital Dirham (CBDC) in 2025
By The United Arab Emirates is gearing up to launch its own central bank digital currency, the Digital Dirham (CBDC), by 2025. This significant move positions the UAE alongside other nations that are investigating the potential of this cutting-edge technology.
According to Khaleej Times, the Central Bank of the UAE is planning to introduce the Digital Dirham for daily use by 2025. It is designed to be compatible with existing payment networks and will exist alongside physical dirhams. Users will be able to access the digital currency through a variety of regulated financial institutions, including traditional banks, money transfer providers, and fintech companies.
This platform will use advanced security protocols, smart contracts, and tokenization to ensure secure and efficient transactions, especially for complex deals involving multiple participants.
Digital Dirham rebranding
The CBUAE has also created a strong infrastructure for the Digital Dirham, including a specialized platform and an easy-to-use digital wallet. This will allow for smooth transactions in various sectors, from everyday purchases to large-scale commercial activities and international exchanges.
After a successful rebranding, the Digital Dirham became internationally recognized thanks to its unique icon. The UAE’s efforts to create a digital currency began in June 2024 with the introduction of rules governing stablecoins. These rules require licenses for any stablecoins tied to the dirham. As a result, Tether, among others, is at the forefront of developing AED-based tokens.
Compared to privately issued stablecoins, the CBDC Digital Dirham offers superior functionality. Being a government-backed digital currency, it provides enhanced security, strict regulatory measures, and direct control from the central bank, unlike independently issued cryptocurrencies.
In addition to these efforts, the UAE is leading the innovative «Aber» initiative. Together with global partners like Saudi Arabia, the country is exploring how digital currencies can facilitate smooth cross-border financial transactions. Meanwhile, the UAE continues to improve the Digital Dirham through ongoing testing and innovation. Many countries around the world, such as Russia, China, Sweden, etc., are doing the same thing, actively studying the possibilities of issuing their own digital currencies. Along similar lines, the European Central Bank is thoroughly investigating the prospects of introducing a Digital Euro.
