UAE central bank introduces wholesale, retail digital dirham strategy

The Central Bank of the United Arab Emirates (CBUAE) is preparing to implement the first phase of a central bank digital currency (CBDC) strategy. It is looking at CBDC for both retail and wholesale use.

The CBUAE kicked off the new strategy with a signing event on March 23 with R3 and G42 Cloud, part of the emirates-based AI holding company G42. R3 will provide the infrastructure for the digital dirham and G42 Cloud will provide the technology.

The first phase of the strategy will have three components. It envisions the soft, or limited, launch of Project mBridge. Second will be a proof-of -concept for a bilateral CBDC bridge with India, one of the UAE’s top trading partners. Third will be a proof-of-concept of a domestic CBDC for both wholesale and retail use. According to a statement from the CBUAE:

“CBDC will help address the pain points of domestic and cross-border payments, enhance financial inclusion and the move towards a cashless society.”

The CBDC strategy is part of the CBUAE’s larger Financial Infrastructure Transformation Programme.

The CBUAE is one of the original participants in Project mBridge, which is described as “first real-value cross-border CBDC pilot.” It also cited Project Aber, undertaken with the Saudi Central Bank, as a successful initiative that preceded the new strategy.

According to international professional services firm EY, the CBUAE is “is encouraging all commercial banks and payments processors in the country to participate in a pilot integration with the CBUAE node for issuing Digital Dirham; the regulator has also decreed Digital Dirham adoption by all UAE licensed financial institutions (LFI) by 2026.”

The agreements with R3 and Abu Dhabi-based G42 were announced in March 2023. At the time, it was expected that the implementation of the strategy would take 12 to 15 months.


G42 entered into a deal with OpenAI in October that would see cooperation in financial services, energy, healthcare and public services.

R3 is a major developer of CBDC technology. It is the provider of the Corda permissioned blockchain. It has been involved in numerous Bank for International Settlements projects, as well as others.