The UAE will launch the digital dirham in Q4 2025 to enhance stability, cut costs, and fight financial crime.
The United Arab Emirates anticipates that the launch of their digital currency, the digital dirham, will take place around the fourth quarter of the year 2025.
According to a report that was published in the Khaleej Times, Governor Khaled Mohamed Balama of the Central Bank of the United Arab Emirates reportedly stated that the blockchain-based currency has the potential to promote financial stability and assist in the fight against financial crime.
The retail industry may be able to anticipate the introduction of a digital dirham into circulation during the final quarter of the year 2025, as stated in the research.
According to reports, Balama stated that the digital dirham will make it possible to further facilitate the development of innovative digital products, services, and new business models while simultaneously cutting costs and expanding access to international markets.
It was also claimed in the article that both the digital dirham and its physical equivalent will be accepted as a mode of payment across all payment channels. The announcement arises at the same time as the digital dirham underwent a rebranding.
The first letter of the dirham will serve as the currency’s international symbol, and it will also feature two horizontal lines inspired by the flag of the United Arab Emirates, which will signify the currency’s stability.
The road to digital dirhams in the UAE
Additionally, in June of 2024, the CBUAE gave its approval to a license system that will regulate stablecoins. Abu Dhabi was the location of a meeting between the board of directors of CBUAE and UAE officials, during which they discussed and agreed on the framework for the government’s financial infrastructure program.
The new laws provided a better understanding of the issuance, licensing, and oversight of payment tokens backed by the UAE dirham. Following the framework’s adoption, the stablecoin issuer Tether made public its intention to establish a dirham-backed stablecoin in collaboration with Phoenix Group and Green Acorn Investments, two local partners.
A fully backed digital version of the United Arab Emirates dirham money is the goal of the collaboration. Following the adoption of the framework, other players entered the competition to develop a stablecoin that is backed by dirhams.
A firm known as AED Stablecoin was granted approval in principle on October 18, 2024, for the purpose of creating a regulated dirham-pegged stablecoin in the United Arab Emirates at that time. On the first of November, The Open Network (TON) announced that the dirham-pegged stablecoin that Tether is developing will be deployed on its blockchain network.
Stablecoins in the UAE
Not only have stablecoins backed by the dirham gained popularity in the country, but also stablecoins backed by the US dollar and the euro. In accordance with its crypto token policy, the Dubai Financial Services Authority, which is the independent regulator for the Dubai International Financial Centre (DIFC), acknowledged Circle’s USDC and EURC as the first stablecoins on Wednesday, February 24.
During this time, a spokeswoman for Ripple had previously stated to Cointelegraph that the business is making efforts to comprehend the stablecoin standards demanded by the country.
The company’s spokeswoman confirmed that they are closely monitoring the developments and that their RLUSD stablecoin is currently available in the United Arab Emirates.
