The Central Bank of the UAE Unveils New Dirham Symbol and Digital Dirham Initiative
The Central Bank of the UAE (CBUAE) has unveiled a new symbol for the UAE’s national currency, the Dirham, along with the announcement of the Digital Dirham as a CBDC (central bank digital currency). As per the press release CBUAE also announced the progress of the Issuance and Circulation of the Digital Dirham, a key initiative of the Financial Infrastructure Transformation (FIT) Program launched by the CBUAE in 2023.
The initiative aims to bolster the UAE’s position as a pioneer in Financial Market Infrastructure (FMI) and a destination for excellence in financial products innovation and digitalization.
The UAE’s Digital Dirham is underpinned by Federal Decree-Law No. (54) of 2023 amending certain provisions of Federal Decree-Law No. (14) of 2018 concerning the Central Bank and Regulation of Financial Institutions and Activities. This will ensure the acceptance of the Digital Dirham as a universal payment instrument (legal tender) in all payment outlets and channels alongside physical currency.
H.E. Khaled Mohamed Balama, Governor of the CBUAE, said, “We are proud to unveil today the new symbol for the UAE’s national currency the “Dirham” in both its physical and digital forms, and the design of the Digital Dirham wallet. This reflects the significant advancements in the implementation of the Digital Dirham program and a leap towards realizing the CBUAE’s vision.”
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The Digital Dirham is powered by blockchain
The announcement explains that the Digital Dirham CBDC will be considered as the digital version of UAE’s national currency, with high levels of security and efficiency and will reduce the costs of payments as it is built on blockchain technology.
Furthermore individuals and businesses will be able to obtain the Digital Dirham through licensed financial institutions, such as banks, exchange houses, finance companies and fintech companies, according to the use cases that will be activated. The issuance of the Digital Dirham is expected to take place in the last quarter of the year 2025 for retail sector.
Balama added that the blockchain based Digital Dirham will enhance financial stability, inclusion, resilience, and combatting financial crime. He also noted that it would further enable the development of innovative digital products, services, and new business models, while reducing cost and increasing access to international markets.
Advantages of the Digital Dirham CBDC
The Digital Dirham will offer several key advantages and characteristics that drive development and innovation, including facilitation of tokenization, and smart contracts allowing complex transactions to be automatically settled.
As for the new symbol it will be applied for both the physical form of the currency and the digital form. The chosen letter was derived from the English name of the Dirham, to serve as an international symbol representing the nation’s currency, incorporating two horizontal lines that embody the stability of the UAE Dirham.
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Moreover, the Digital Dirham symbol features a circle surrounding the physical currency symbol, using the colors of the UAE flag to reflect pride and national identity.
The symbol choice serves as evidence of the national currency’s global reach and openness to a more prosperous future, and commitment to developing an innovative local financial ecosystem with a global perspective.
The CBUAE unveils the Digital Dirham wallet
The CBUAE has developed an integrated and secure platform for the issuance, circulation, and use of the Digital Dirham, the Digital Dirham wallet. The wallet will enable a number of financial transactions, including retail, wholesale, and cross-border payments, money transfers and withdrawals, top-ups, and redemption of the Digital Dirham when needed. This ensures a seamless and convenient user experience, in line with industry best standards and practices.
AED Stablecoin regulations were previously issued by the Central Bank of UAE, allowing for regulated AED backed stablecoins to be used as a legal tender for purchases.
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