- The UAE conducted its first live government financial transaction using the digital dirham via the mBridge platform.
- The transaction was part of the pilot phase for the wholesale digital dirham project, aimed at improving payment efficiency.
- The Central Bank of the UAE partnered with R3 to develop the wholesale and retail CBDC solutions using Corda blockchain technology.
- The transaction was completed in under two minutes, demonstrating near-instant settlement capabilities without intermediaries.
- The project targets cost reduction, faster settlements, and enhanced financial inclusion across retail, wholesale, and cross-border payments.
Last week, the UAE Ministry of Finance and the Dubai Department of Finance (DOF) successfully carried out the first live government financial transaction using the digital dirham. This transaction utilized the mBridge platform, a blockchain-based central bank digital currency (CBDC) solution primarily designed for cross-border payments. The pilot phase marks a key milestone in the wholesale digital dirham initiative, part of the UAE’s broader CBDC efforts that include wholesale, retail, and cross-border payment systems.
“The first pilot Digital Dirham transaction, executed through the government payments platform, mBridge, was conducted to test operational readiness and ensure seamless technical integration with the Central Bank’s systems,” said Ahmed Ali Meftah, Executive Director of Central Accounts Sector at DOF. He added that the transaction finalized in less than two minutes, highlighting the project’s focus on enhancing operational efficiency and accelerating financial settlements between federal and local government bodies.
The use of CBDC technology targets reduced transaction costs and near-instant payment settlements across various sectors. Earlier in 2023, the Central Bank of the UAE partnered with R3, a blockchain technology company, to create both wholesale and retail CBDC platforms based on the Corda enterprise blockchain. This government payment, facilitated by the integration of the wholesale CBDC with the mBridge platform, demonstrated the ability to settle payments without intermediaries.
The digital dirham project aligns with the UAE’s goal to promote greater financial inclusion through advanced digital payment infrastructures.
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