The digital Dirham is the UAE’s upcoming Central Bank Digital Currency (CBDC), which is powered by the blockchain. In addition, it is a secure and legal alternative to cash because the Central Bank of the UAE will issue it.
Therefore, it holds the same value as the physical dirhams and is backed by the law. Moreover, it is a part of the broader FIT programme of the UAE. Thus, it aims to boost its transition into a fully digital economy.
Key Benefits for UAE Residents with the Digital Dirham
- Instant and low-cost transfer: It will remove the long wait or hefty remittance fees. Indeed, you have guessed it right. Now, you can transfer the dirham instantly and affordably with digital dirham – internationally or locally.
- Smart payment with smart contracts: You can automate rent, installments, or pocket money through programmable money. Moreover, it supports tokenized assets and smart tourism wallets.
- Secure and transparent transaction: Every transaction through the digital dirham is traceable because it is built on blockchain technology. Thus, it will decrease fraud, theft, or mismanagement of funds.
- Financial inclusion: Even those people who don’t have bank accounts can use them through fintech apps, exchange houses, or digital wallets. Therefore, it could be a game-changer for the unbanked population.
How Will It Work?
You can access the digital dirham app for the following purposes:
- Choose wallet providers
- Top up accounts
- Redeem or acquire currency
- Make P2P, in-store, or B2B/G2C payments
Rollout Timeline and Interoperability
The retail launch is expected to take place in Q4or the last quarter of this year, after the successful trial run in India and China. Surprisingly, the payment for Dh50 million gets cleared in only 7 seconds in those nations.
The digital currency will fully interoperability with the traditional dirham and bank deposits. Remember, it will not bear any interest, which makes it ideal for daily use, not for saving like a bank deposit.
Why the digital dirham matters
- Faster and cheaper remittance for expats
- Smart and secure tap-to-go shopping for customers
- Real-time B2B settlement for business
- Most importantly, it will provide unbanked people with access to digital money without a bank account.
It is not cryptocurrency
The digital dirham is not a crypto because it is regulated and supported by the government. In addition, it is fully integrated into the financial ecosystem of the UAE. By the end of 2025, your phone could replace your wallet. Moreover. Cash could soon become a thing of the past.
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