The United Arab Emirates plans to launch its digital currency, the digital dirham, in late 2025. This new blockchain-based currency aims to enhance financial stability and fight financial crimes, according to the Central Bank’s Governor, Khaled Mohamed Balama. The digital dirham will be accepted alongside the physical dirham across all payment systems, promoting innovative digital services and easier access to global markets. Additionally, the Central Bank has approved a licensing framework for stablecoins, leading to plans for creating dirham-backed stablecoins in collaboration with partners like Tether. This initiative marks a significant step towards integrating digital currencies in the UAE’s financial landscape.
The United Arab Emirates is set to launch its digital dirham, a central bank digital currency (CBDC), in the fourth quarter of 2025. This announcement was made by Khaled Mohamed Balama, the Governor of the Central Bank of the UAE.
According to reports from Khaleej Times, the digital dirham will operate on blockchain technology, aiming to enhance financial stability while combating financial crime. The retail sector is especially optimistic about the upcoming currency, anticipating its rollout to modernize payment methods and improve Market access.
Balama emphasized that the digital dirham would foster the creation of innovative digital products and services, ultimately lowering transaction costs and expanding international Market connectivity. The new currency will be accepted across all payment platforms, aligning both digital and physical dirhams as convenient options for consumers.
In line with this initiative, the UAE is also introducing a new symbol for the dirham—featuring the first letter of its name and two horizontal lines symbolizing its stability, inspired by the UAE flag.
The journey towards the digital dirham began early, with the Central Bank of the UAE approving a framework for regulating stablecoins in June 2024. This regulatory environment aims to manage payment tokens backed by the UAE dirham. Following this, established players, including Tether and AED Stablecoin, have announced plans to launch dirham-backed stablecoins, indicating a growing interest in digital finance solutions within the region.
Overall, the initiative to introduce a digital dirham is set to revolutionize the financial landscape in the UAE, offering significant benefits to businesses and consumers alike as the country continues to embrace digital transformation.
Relevant Tags: UAE, Digital Dirham, Central Bank Digital Currency, CBDC, Blockchain, Financial Stability, Stablecoins, Digital Payments
What is the digital dirham?
The digital dirham is a new form of currency that the UAE plans to introduce. It will be used for online transactions and to make payments easier and safer for everyone.
When will the digital dirham be available?
The UAE expects to roll out the digital dirham in the fourth quarter of 2025. This means it should be ready for people to use by late 2025.
Why is the UAE launching a digital dirham?
The UAE wants to make transactions faster and more secure. The digital dirham will help promote digital payments, reduce cash usage, and keep up with global trends in finance.
How will the digital dirham work?
The digital dirham can be used with smartphones and other digital devices. People will be able to send money, pay for goods and services, and even use it for online shopping in a simple way.
Will the digital dirham replace cash?
No, the digital dirham won’t completely replace cash. It will exist alongside the physical dirham. People can choose whether to use cash or digital payments based on what they prefer.