UAE unveils new dirham symbol inspired by national flag
On Thursday, the Central Bank of the UAE announced the national currency symbol in its physical/worlds and digital modes.
The symbol emerged from the English name of dirham in order to identify general symbol for the currency, in addition to a horizontal sign to embody the basic principle of the stability of the UAE dirham and to be inspired from the color of the flag of the UAE which symbolize the financial and monetary stability.
In contrast, the digital dirham symbol consists of a physical currency symbol that is circumscribed by a circular, using the UAE flag colours to show spirit and national identity.
It Symbolizes — A global reach of the national currency, openness — to a happier future, a statement to — creating a vibrant innovative local financial ecosystem, with a global mindset.
The CBUAE also announced the advancement of the Issuance and Circulation of the Digital Dirham, an integral component of the financial infrastructure transformation (FIT) Programme project launched by the CBUAE in 2023 to enhance the UAE status as a leader in Financial Market Infrastructure (FMI) and a hub of excellence in innovation and digitalisation of financial products.
The UAE's Digital Dirham also rests on the Federal Decree-Law No. (54) of 2023 amending some provisions of Federal Decree-Law No. (14) of 2018 Regarding the Central Bank and Regulation of Financial Institutions and Activities. This will guarantee the Digital Dirham being treated as a universally accepted payment instrument (legal tender) retrofitted into all payment outlets and platforms just like physical currency.
The new dirham symbol launch coincides with the Code’s announcement that the CBUAE had recently joined the FX Global Code, becoming the first centralized bank in the Arab region to join, as part of the CBUAE’s initiatives for the establishment of the UAE Dirham as a strong international currency, as well as for the integrity and good practices of the exchange market of the national currency versus foreign currencies and the dissemination of professionalism and sound ethics for traders in the market.
The digital Dirham, which is issued by the CBUAE as a digital form of the UAE national currency, is a virtual currency that is the most secure and efficient form of the UAE Dirham and has the potential to further reduce the cost of payments based on its reliance on blockchain technology which by its technical design insurance cost and economic risk are effectively mitigated by ensuring data security/privacy, and atomic completion of transactions.
According to the use cases that will be enabled, individuals and businesses will be able to access the Digital Dirham through licensed financial institutions, including banks and exchange houses, finance companies and fintech company. For the retail sector, the Digital Dirham will be issued to the market in the 4th quarter of the year 2025.
Key attributes and features of the Digital Dirham that would spur growth and innovation include the following:
Tokenization is enabled by the Digital Dirham, increasing financial access and efficiency and offering improved liquidity with fractionalisation of digital assets.
Smart contractsUsing the Digital Dirham with smart contracts enables the programming of the execution of complex transactions automatically and their instantaneous settlement, in addition to multi-stage and multi-party transactions involving conditions or obligations.
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