Implementing the first government transaction in the UAE using the digital dirham

The Ministry of Finance and Dubai Finance announced the implementation of the first government financial transaction in the country using the digital dirham, in cooperation with the Central Bank of the United Arab Emirates. The implementation of the transaction represents an experimental step that paves the way for expanding the scope of the use of the national digital currency in government and private transactions, in a new national achievement that reflects the UAE’s leadership in adopting future financial technologies.

This event comes within the framework of the pilot phase of the Digital Dirham project, which was launched by the Central Bank as part of the transformation program in the country’s financial infrastructure, and in coordination with local financial authorities, with the aim of accelerating the adoption of digital solutions and enhancing the UAE’s position as a global center for financial innovation.

His Highness Sheikh Mansour bin Zayed Al Nahyan, Vice President of the UAE, Deputy Prime Minister, Head of the Presidential Court and Chairman of the Board of Directors of the Central Bank of the United Arab Emirates, affirmed that “the digital dirham represents a strategic pillar in the UAE’s journey towards establishing an integrated digital economy, and embodies the vision of the wise leadership in consolidating the country’s position as a global financial center.”

His Highness blessed the conduct of the first government financial transaction in the digital dirham, between the federal government and the government of Dubai, praising the distinguished level of integration between financial systems at the state level, and the witnessed development in the technical infrastructure that would support financial sustainability and sustainable growth of the overall national economy.

His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, said: “The use of the digital dirham in government transactions embodies the Ministry of Finance’s commitment to accelerating the digital transformation in public money management, and raising levels of transparency and efficiency in the government financial system.”

His Highness added: “This strategic step confirms the integration of the national financial system, and supports the vision of the UAE leadership in building an advanced national digital economy based on innovation and trust.”

His Highness said in a blog post on the “X” website yesterday: “Today, the Ministry of Finance and (Dubai Finance) recorded an important step in the history of government financial transformation in the UAE, as we implemented the first government transaction using the digital dirham issued by the Central Bank, which will represent the future of the national digital currency in government and private transactions.”

His Highness added: “The use of the digital dirham in government transactions embodies the Ministry of Finance’s commitment to accelerating the digital transformation in public money management and raising levels of transparency and efficiency in the government financial system. This strategic step confirms the integration of the national financial system and supports the vision of the UAE leadership in building an advanced national digital economy based on innovation and trust.”

On this occasion, Minister of State for Financial Affairs, Mohammed bin Hadi Al-Husseini, stressed that “the use of the digital dirham in implementing government transactions is a qualitative transformation in the use of financial technology,” considering that it provides broad opportunities for developing government and private payments.

He said: “Conducting the first government transaction in the digital dirham, in partnership with the UAE Central Bank, is a pioneering model of government institutional integration, and contributes to enhancing the global financial community’s confidence in our economic system.”

In turn, the Governor of the Central Bank of the United Arab Emirates, Khaled Mohammed Al-Amaa, stressed that “the launch of the pilot phase of the digital dirham represents a qualitative achievement in the process of digital transformation, and embodies the vision of the wise leadership and the UAE’s commitment to developing national payment systems, enhancing financial stability, advancing the country’s financial system, and consolidating its global leadership position in the field of financial innovation.”

He said: “The Central Bank continues to work with its strategic partners to provide innovative financial solutions that keep pace with global transformations, support the stability and flexibility of the national economy, and contribute to establishing a globally competitive digital economy.”

For his part, Abdul Rahman Saleh Al Saleh, Director General of Dubai Finance and Vice Chairman of the Board of Directors of the Central Bank, expressed his thanks and appreciation for the wise leadership, stressing that “the UAE is always at the forefront of applying the latest financial technologies in the fields of business, financial and digital economy.”

He said: “The completion of the first government transaction in the digital dirham reflects the high level of integration between financial systems at the state level, the continuous coordination with the Central Bank, and the maturity of the institutional and digital infrastructure that supports everyone’s efforts to continue building an integrated macro economy.”

The trial transaction was conducted using the digital dirham via the “Al-Jisr” platform for government payments, within the framework of a pilot model that tests operational readiness and technical integration with the Central Bank’s systems, according to what was explained by the Executive Director of the Central Accounts Sector at Dubai Finance, Ahmed Ali Muftah. Muftah said, “The goal of conducting this experimental transaction is to improve operational efficiency and speed up financial settlements between government agencies and across the various federal and local government financial systems in the country,” explaining that the transaction “is completed in less than two minutes.”

The “Bridge” platform for multiple central bank digital currencies (CBDC) was developed and implemented by the Central Bank, with the aim of enabling government agencies to conduct financial settlements in a secure manner, using the Central Bank’s digital currency.

The platform is fully integrated with the Digital Dirham Initiative led by the UAE Central Bank, so that the platform acts as a unified and advanced channel that facilitates the issuance, receipt and settlement of government payments in a safe, reliable and efficient digital manner, without the need for intermediaries.

The platform also plays an effective role in enhancing the operational efficiency of government entity payments, by accelerating transactions, reducing operational costs, and raising the level of financial transparency and accuracy, which supports the digital transformation process in the UAE and enhances its position as a global leader in adopting advanced financial technologies.

Transparency and efficiency

The initiative confirms that the UAE is moving confidently towards an integrated digital economy, and continues to consolidate its regional and global leadership in adopting modern technical solutions in the fields of government, finance and business, in a way that supports transparency and efficiency, and raises the level of integration and sustainability in various government financial systems.

. The experimental transaction was conducted using the digital dirham via the “Al-Jisr” platform for government payments.

. The “Al-Jisr” platform works as a unified and advanced channel that facilitates the issuance, receipt and settlement of government payments, in a safe and reliable digital manner, without the need for intermediaries.