UAE Plans to Launch Digital Dirham by Q4 2025 to Boost Financial Stability and Combat Financial Crime

The United Arab Emirates (UAE) is on track to roll out its digital dirham central bank digital currency (CBDC) in the fourth quarter of 2025, aiming to modernize the country’s financial landscape. According to a report by Khaleej Times, Khaled Mohamed Balama, the Governor of the Central Bank of the UAE (CBUAE), emphasized that the digital dirham could strengthen financial stability and help curb financial crime. The blockchain-based currency is expected to be fully integrated into the UAE's financial infrastructure, providing new opportunities for both consumers and businesses.

The Digital Dirham's Role in Financial Innovation

The introduction of the digital dirham is seen as a step toward enhancing the UAE’s digital economy. Balama highlighted that the digital dirham would not only improve financial stability but also spur the development of new digital products, services, and business models. By reducing costs and increasing access to international markets, it could become an essential tool for both domestic and global transactions.

In terms of its usability, both the digital and physical dirham will be accepted across all payment channels, ensuring seamless integration with existing payment systems in the country. As part of its rollout, the digital dirham will feature a rebranded logo: the first letter of the dirham symbol, with two horizontal lines inspired by the UAE flag, symbolizing the currency's stability.

The Road to the Digital Dirham

The UAE has taken significant steps toward digital currencies in recent years. In June 2024, the CBUAE approved a licensing framework for regulating stablecoins, which clarified the rules surrounding the issuance, licensing, and supervision of payment tokens backed by the UAE dirham. This move laid the foundation for the creation of digital assets linked to the national currency.

One of the first projects following this approval was Tether, which announced plans to launch a dirham-backed stablecoin in collaboration with Phoenix Group and Green Acorn Investments. This stablecoin aims to provide a fully-backed digital representation of the UAE dirham.

In October 2024, another company, AED Stablecoin, received in-principle approval to issue a regulated dirham-pegged stablecoin. Meanwhile, Tether’s dirham-backed stablecoin is set to launch on the Open Network (TON) blockchain, marking an important milestone for the UAE's digital currency ecosystem.

The Growth of Stablecoins in the UAE

While dirham-backed stablecoins are making their mark, the UAE has also seen growing interest in other stablecoins, such as US dollar (USD) and euro (EUR) backed tokens. In February 2025, the Dubai Financial Services Authority (DFSA), the regulator for the Dubai International Financial Centre (DIFC), officially recognized Circle’s USDC and EURC stablecoins as the first under its crypto token regime.

Additionally, Ripple has shown interest in the UAE market. A Ripple spokesperson confirmed that the company is closely monitoring the country’s stablecoin regulatory developments, and its RLUSD stablecoin is already available in the UAE.

Conclusion

The UAE's digital dirham is set to be a game-changer, providing a modern, blockchain-based solution to traditional currencies. With the backing of the CBUAE and a strategic focus on innovation and financial security, the digital dirham could significantly impact the country's financial landscape. As the UAE continues to embrace the future of digital currencies and stablecoins, it is positioning itself at the forefront of the global blockchain movement.

For more information on Ethereum and other cryptocurrencies, visit CoinMarketCap’s Digital Dirham page.