The United Arab Emirates has made its first transaction using its central bank digital currency in the first major update to the project since it was announced in March.

UAE Ministry of Finance and Dubai Finance he said on Tuesday said the transaction was part of the pilot phase of the Digital Dirham project and used the government’s mBridge payment platform.

The agencies said the deal was a first for the UAE government and “a step towards broader adoption of the national digital currency in both government operations and the private sector.”

This is the first major update to the CBDC since the UAE central bank said in March that it expected the rollout of the digital currency to begin in the fourth quarter of 2025.

The test transaction took less than two minutes

Dubai Finance’s executive director of central accounts, Ahmed Ali Meftah, said the transaction was carried out to “test operational readiness and ensure seamless technical integration with the Central Bank’s systems.”

“The transaction was completed in less than two minutes, underscoring its goal of increasing operational efficiency and accelerating financial settlements between federal and local government entities.”

The implementation will take place in stages

In a political document released in July, the Central Bank of the United Arab Emirates said that CBDC is an attempt to future-proof central bank money for the digital age and in response to the changing needs of the digital economy.

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It also indicated that the rollout would be phased and that CBDC features at launch would be circumscribed to payments only, to avoid competing with savings and other interest-bearing financial products.

CBDCs are a hotly debated issue, with critics fearing they could invade privacy and undermine the financial sector by allowing users to be direct customers of central banks, while supporters say CBDCs can improve payment efficiency and boost financial inclusion.

So far, only three have successfully launched CBDCs

Many governments have experimented with CBDCs. In October, Kyrgyzstan confirmed that it plans to issue a central bank digital currency, while the European Central Bank decided to move to the next phase of its digital euro project.

However, only three CBDCs have been officially launched, According to to the American think tank Atlantic Council.

Its CBDC tracker lists Nigeria, the Bahamas and Jamaica as the only three jurisdictions with an vigorous CBDC token, while another 49 countries are in the pilot phase.

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