The Central Bank of the UAE (CBUAE) is gearing up to launch its Digital Dirham, a central bank digital currency (CBDC), between October and December. The CBUAE anticipates the digital currency will enhance the security and efficiency of financial transactions, while simultaneously lowering costs for both domestic and international payments. To facilitate the use of the Digital Dirham, the CBUAE has developed a dedicated digital wallet.
A CBDC, in essence, is a digital representation of a nation’s fiat currency, issued and managed on a blockchain. Each digital token mirrors the value of its traditional fiat counterpart, offering a potentially more streamlined and efficient alternative to traditional payment methods. The UAE’s move towards a CBDC reflects a global trend as central banks explore the potential of digital currencies to modernize financial systems.
