UAE to Launch Digital Dirham: Seamless Payments, Pocket Money Transfers, and More Coming Soon
August 6, 2025
Residents and visitors in the UAE will soon be able to shop, send money to friends, and even give pocket money to children using a fully digital version of the national currency — the Digital Dirham. Developed by the Central Bank of the UAE (CBUAE), this new Central Bank Digital Currency (CBDC) is designed to serve as a seamless and secure alternative to physical cash.
Retail Rollout Expected by End of 2025
While an exact launch date hasn’t been confirmed, the CBUAE has indicated that the retail rollout of the Digital Dirham is expected in the last quarter of 2025. Once launched, the Digital Dirham will be accepted for a wide range of payments — including peer-to-peer (P2P), in-store purchases, online shopping, business transactions, and government-to-consumer (G2C) payments.
The currency will be fully fungible with cash and traditional bank deposits but will not bear interest. Its primary role will be to facilitate payments, not serve as a savings instrument.
CBUAE’s Digital Wallet and App Prototype
To support this initiative, the Central Bank has developed a comprehensive platform for the issuance, trading, and use of the Digital Dirham. A prototype app has already been created, allowing users to:
Choose their digital wallet provider
Make and receive payments
Top up and redeem Digital Dirham
Access tailored use cases such as government benefits or tourist wallets
Four Key Use Cases Tested
As part of the pilot phase, the CBUAE tested four practical use cases for the Digital Dirham:
Fractional Ownership of Tokenised Assets
Smart Tourist Wallet
Smart Social Benefit Payments
Parent-Child Sub-Wallets
In the social benefits trial, the Ministry of Community Development (MOCD) distributed food subsidies using programmable Digital Dirhams. This allowed the government to control how and where funds could be spent, ensuring transparency and real-time monitoring.
Phased Rollout and Future Expansion
The implementation of the Digital Dirham will follow a phased approach, supported by clear policy guidelines to ensure secure and trusted adoption. The Central Bank is also working on cross-border arrangements, collaborating with other central banks, local and international banks, exchange houses, and global institutions.
In the future, the Digital Dirham is expected to support advanced financial features like:
Offline usability
Smart contracts
Cross-border transactions
Promoting Innovation and Financial Inclusion
According to the CBUAE, the Digital Dirham is not only a step toward modernizing the UAE’s financial infrastructure but also a tool for enhancing financial inclusion. By making digital payments accessible to unbanked residents and non-residents, the new currency aims to increase transaction speed, reduce costs, and offer more secure, flexible payment options.
The design of the Digital Dirham aligns with global standards, drawing from best practices issued by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS).
In Summary
The Digital Dirham is poised to revolutionize the way residents, businesses, and visitors interact with money in the UAE. With smart wallets, programmable features, and a robust regulatory framework, it marks a major milestone in the country’s journey toward a digitally driven economy.
