Last week the UAE Ministry of Finance and Dubai Department of Finance (DOF) announced the execution of the first live government financial transaction using the digital dirham. It leveraged the mBridge platform, a CBDC solution mainly used for cross border payments. The UAE is advancing its CBDC plans across three fronts: wholesale, retail and cross border. This transaction marked the launch of the pilot phase of the wholesale digital dirham project.
“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. “The transaction was completed in less than two minutes, underscoring its goal of enhancing operational efficiency and expediting financial settlements between federal and local government entities.”
This aligns with one of the primary goals of the CBDC project: to reduce costs and enable near instant settlement for retail, wholesale and cross border transactions. Additionally, the UAE’s goal is to improve financial inclusion. In early 2023 the Central Bank of the UAE partnered with R3 to develop both the wholesale CBDC and retail solution using the Corda enterprise blockchain. This recent inter-government payment used the R3 integration between the production wholesale CBDC and mBridge platforms, with the Ministry of Finance describing it as the settlement of government payments “without intermediaries”.
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