Daijiworld Media Network – Abu Dhabi

Abu Dhabi, Nov 13: In a major financial milestone, the Central Bank of the United Arab Emirates (CBUAE) has officially declared the Digital Dirham as full legal tender, marking a defining moment in the country’s march towards a digitally empowered economy. The announcement, made earlier this week, confirms that the UAE’s e-currency will now hold the same legal status as physical cash for all types of financial transactions across the nation.

Issued under the authority of the UAE Federal Government, the landmark ruling mandates that the Digital Dirham must be accepted for all payments, making it a mandatory mode of settlement alongside coins and banknotes. This step further strengthens the UAE’s position as a global front-runner in financial innovation and digital governance.

Chief officials from the Central Bank noted that the move represents a major policy advancement under the UAE’s Digital Dirham Policy 2025. The legislation officially equates the digital currency with physical money, ensuring that one Digital Dirham carries the exact same value and acceptance as one traditional Dirham.

Unlike private cryptocurrencies, the Digital Dirham operates as a Central Bank Digital Currency (CBDC) — a fully regulated, state-backed digital form of the national currency. It is non-interest bearing, fully fungible, and directly guaranteed by the CBUAE, ensuring that one Digital Dirham can always be redeemed one-to-one for physical cash.

The Digital Dirham will function under a two-tier system to ensure smooth integration with the existing financial structure:

• Issuance: Managed directly by the CBUAE, ensuring the security and authenticity of every digital unit.

• Distribution: Facilitated through licensed intermediaries such as banks, exchange houses, and authorized payment service providers.

Consumers and businesses will be able to store and use Digital Dirhams via secure digital wallets, making transactions instant, safe, and transparent. The initiative has already shown promising results through successful trials on the mBridge platform, where cross-border transactions were completed in just under two minutes.

The CBUAE has clarified that while the form of currency changes, its value remains constant. One Digital Dirham equals one physical Dirham — ensuring complete stability.

Employees can expect faster, more efficient salary transfers as companies adopt the new system. Payments, including daily purchases and bills, will become quicker and cheaper due to the elimination of traditional banking delays. Moreover, all businesses across the UAE will be legally required to accept Digital Dirham payments.

The introduction of the Digital Dirham as full legal tender is being hailed as a visionary step in the UAE’s ongoing Financial Infrastructure Transformation (FIT) Programme. Experts believe this shift will not only enhance financial inclusion but also position the UAE as a pioneer in sovereign digital finance.

By merging regulatory strength with cutting-edge technology, the UAE has sent a clear message to the world — it is not just adapting to the digital era but leading it from the front.