The Ministry of Finance and the Dubai Department of Finance (DOF) have completed the UAE’s first government financial transaction using the Digital Dirham, in collaboration with the Central Bank of the UAE (CBUAE).

The transaction marks a key milestone in the pilot phase of the Digital Dirham project under the CBUAE’s Financial Infrastructure Transformation (FIT) Programme, which aims to advance digital payments and strengthen the UAE’s position as a global financial hub.

Sheikh Mansour bin Zayed Al Nahyan, Vice President, Deputy Prime Minister, Chairman of the Presidential Court, and Chairman of the CBUAE, said the Digital Dirham is a “strategic pillar in the UAE’s pursuit of establishing an integrated digital economy” and reflects the leadership’s vision to “consolidate the UAE’s position as a global financial hub.”

He added that the first government transaction between the Federal and Dubai Governments demonstrates “the high level of integration across national financial systems and the advanced technical infrastructure supporting sustainable financial growth and macroeconomic stability.”

The mBridge platform for multiple central bank digital currencies (CBDCs) was developed by the CBUAE to enable government entities to conduct settlements securely using the Digital Dirham.

Fully integrated with the Digital Dirham initiative, the platform provides a unified channel for issuing, receiving, and settling government payments without intermediaries, improving efficiency, transparency, and cost-effectiveness.

The initiative marks a further step in the UAE’s transition towards a fully integrated digital economy and supports its broader efforts to modernise financial systems across government and business sectors.

Featured image credit: Edited by Fintech News Middle East, based on image by freepik