CBUAE Confirms Q4 2025 Retail Digital Dirham Launch Under Two-Tier Intermediated Model

The Central Bank of the UAE published a report on the Digital Dirham at the end of July 2025, setting out the architecture and timeline for the country's retail central bank digital currency. The paper confirms a planned launch in the fourth quarter of 2025 and sets out how the Digital Dirham will be structured, distributed and governed within the UAE's financial system.

The retail CBDC will operate under a two-tier intermediated model, meaning the central bank will issue the Digital Dirham to licensed intermediaries, who will then distribute it to end users. Banks, exchange houses and fintech companies have been identified as eligible distribution partners in the first tier below the central bank.

NON-INTEREST-BEARING DESIGN

The Digital Dirham will be non-interest-bearing.

Digital Dirham holdings will be maintained through regulated intermediaries rather than in accounts held directly at the central bank. Customer due diligence and anti-money laundering obligations sit at the intermediary level.

The report noted that the Digital Dirham has been designated as legal tender under the UAE's Central Bank Law, giving it the same status as physical currency for the settlement of debts and obligations within the country.

PROJECT MBRIDGE

Alongside the domestic retail programme, the CBUAE has been participating in Project mBridge, a multi-central-bank platform developed with the Hong Kong Monetary Authority, the People's Bank of China and the Bank of Thailand, originally under the BIS Innovation Hub, which withdrew from the project in October 2024. In January 2024 the UAE made its first cross-border Digital Dirham payment via mBridge, an AED 50 million transfer to China.

The CBUAE said the Digital Dirham will be introduced gradually, with a detailed implementation plan and policy guidance.