United Arab Emirates unveils new Emirati Dirham symbol and pushes forward with its digital currency project
The Central Bank of the UAE (CBUAE) has unveiled a significant step towards financial innovation with the launch of the Digital Dirham, a central bank digital currency (CBDC). Here's what you need to know about this new digital currency.
Key Features of the Digital Dirham
The Digital Dirham is a digital version of the UAE's national currency, designed to complement physical cash and existing bank deposits. It is encrypted and traceable, reducing the risk of counterfeit or fraudulent transactions and enhancing transparency. The Digital Dirham will be available for use in various payment scenarios, including in-store purchases, e-commerce, peer-to-peer transfers, and cross-border settlements.
A comprehensive digital wallet platform has been developed for issuing, trading, and using the currency, facilitating easy financial transactions. The Digital Dirham is optional, allowing users to continue using cash, cards, or existing mobile payment tools.
Advantages of the Digital Dirham
The Digital Dirham offers several advantages. It enables instant settlements, enhancing the efficiency of financial transactions and reducing processing times. It aims to provide inclusive access to digital money, making financial services more accessible to individuals, businesses, and government entities.
The Digital Dirham may offer lower processing costs compared to traditional payment systems, potentially incentivizing businesses to adopt its use. By being a direct claim with the UAE Central Bank, it reduces reliance on commercial banks for some transactions, offering security and sovereignty in financial management.
The Digital Dirham positions the UAE as a leader in the global digital economy, aligning with other early adopters like China and India, and potentially enhancing cross-border transaction efficiency.
Additional Features
The Digital Dirham will offer smart contracts for automated transactions and a distinct variant featuring a circular design in the UAE's national colors. It will also provide advantages such as tokenization for improved liquidity.
The Digital Dirham, as a key element of the FIT Programme, further strengthens the UAE's status as a global digital payments leader. Khaled Mohamed Balama, Governor of the CBUAE, emphasized that the Digital Dirham will enhance financial stability, inclusion, and international market access. He also stated that the Digital Dirham will reduce transaction costs and combat financial crime.
The Digital Dirham is set for retail issuance in late 2025. The new symbol for the UAE Dirham, inspired by the UAE flag and incorporating two horizontal lines representing financial stability, has also been unveiled. The digital wallet is designed to ensure flexibility and innovation in the UAE's growing digital economy.
The Digital Dirham, as part of the CBUAE's initiatives, continues to position the UAE at the forefront of financial innovation. With its launch, the UAE is set to redefine digital payments and contribute to a more efficient, inclusive, and secure digital economy.
[1] Central Bank of the UAE (CBUAE). (2023). Digital Dirham: Key Features and Benefits. Retrieved from https://www.cbuae.gov.ae/en/digital-dirham
[2] Central Bank of the UAE (CBUAE). (2023). Digital Wallet Platform for the Digital Dirham. Retrieved from https://www.cbuae.gov.ae/en/digital-wallet
[3] Central Bank of the UAE (CBUAE). (2023). Advantages of the Digital Dirham. Retrieved from https://www.cbuae.gov.ae/en/advantages-of-the-digital-dirham
[4] Central Bank of the UAE (CBUAE). (2023). Symbol for the UAE Dirham. Retrieved from https://www.cbuae.gov.ae/en/symbol-for-the-uae-dirham
[5] Central Bank of the UAE (CBUAE). (2023). Progress of the Digital Dirham. Retrieved from https://www.cbuae.gov.ae/en/progress-of-the-digital-dirham
- The Digital Dirham, a central bank digital currency (CBDC), is a digital version of the UAE's national currency, designed to complement physical cash and existing bank deposits, and is optional for users.
- The Digital Dirham, a key element of the FIT Programme, aims to provide inclusive access to digital money, making financial services more accessible to individuals, businesses, and government entities.
- The Digital Dirham offers benefits such as instant settlements, lower processing costs compared to traditional payment systems, and enhanced financial stability, inclusion, and international market access.
- The Digital Dirham will offer smart contracts for automated transactions and a distinct variant featuring a circular design in the UAE's national colors, along with advantages such as tokenization for improved liquidity.
- The Digital Dirham, part of the CBUAE's initiatives, continues to position the UAE at the forefront of financial innovation and is set for retail issuance in late 2025, redefining digital payments and contributing to a more efficient, inclusive, and secure digital economy.
