UAE Unveils New Dirham Symbol Alongside Digital Currency Initiative

The Central Bank of the UAE (CBUAE) has introduced a new symbol for the Dirham, reflecting the vision of His Highness Sheikh Mansour bin Zayed Al Nahyan. This initiative aims to reinforce the UAE's status as a global financial centre. The CBUAE also shared updates on the Digital Dirham, a key part of the Financial Infrastructure Transformation Programme launched in 2023.

The Digital Dirham is supported by Federal Decree-Law No. (54) of 2023, which amends certain provisions of Federal Decree-Law No. (14) of 2018. This ensures its acceptance as legal tender alongside physical currency across all payment channels. The CBUAE's recent membership in the FX Global Code marks it as the first central bank in the Arab region to join, aiming to establish the UAE Dirham as an international currency.

The Digital Dirham offers high security and efficiency, reducing payment costs through blockchain technology. This design ensures effective risk management and data protection. Individuals and businesses can access it via licensed financial institutions like banks and fintech companies. The retail sector is expected to see its issuance by late 2025.

Tokenisation is one of its key features, enhancing financial inclusion and liquidity access through digital asset fractionalisation. Additionally, smart contracts enable automatic execution of complex transactions, ensuring instant settlement even for multi-stage or multi-party transactions with specific conditions.

The new symbol for both physical and digital forms of the Dirham was announced by CBUAE. Derived from the English name "Dirham," it includes two horizontal lines symbolising stability and inspired by the UAE flag. The Digital Dirham symbol features a circle around this design, using national colours to reflect pride and identity.

This choice highlights the currency's global reach and commitment to developing an innovative local financial ecosystem with a global outlook. Khaled Mohamed Balama, Governor of CBUAE, expressed pride in unveiling this new symbol and highlighted its significance in advancing the Digital Dirham programme.

An integrated platform for issuing and using the Digital Dirham has been developed by CBUAE, including a user-friendly wallet for individuals and businesses. It supports various transactions like retail payments, money transfers, withdrawals, top-ups, and redemption when needed.

This platform can easily incorporate innovative financial solutions tailored to emerging use cases driven by rapid digital economy growth in the UAE. It ensures a flexible financial system that solidifies the UAE's position as a leading financial hub.

Khaled Mohamed Balama stated that this blockchain-based platform will enhance financial stability and inclusion while combating financial crime. It will also foster innovative digital products and services development while reducing costs and increasing international market access.

With inputs from WAM