The two largest Gulf economies are both pursuing central bank digital currencies, but their strategies have diverged significantly. The UAE has publicly committed to a full-spectrum Digital Dirham programme spanning wholesale cross-border settlement, retail payments, and government disbursements. Saudi Arabia has participated in the same multilateral initiatives but has kept its domestic CBDC plans deliberately opaque. Understanding these different approaches matters for anyone building payment infrastructure in the region.

UAE: The Digital Dirham Programme

The CBUAE's CBDC strategy, published in its Digital Dirham primer, outlines three components:

Wholesale CBDC: The CBUAE has been a founding participant in Project mBridge - the multi-CBDC cross-border platform developed with the BIS Innovation Hub, the Hong Kong Monetary Authority, the Bank of Thailand, and the People's Bank of China's Digital Currency Institute. In December 2025, the CBUAE completed its first government payment using the Digital Dirham, a wholesale transaction that demonstrated central-bank-money settlement on distributed ledger technology.

Retail CBDC: The CBUAE has announced plans for a retail Digital Dirham that would be: Non-interest bearing (to avoid competing with bank deposits) Fully fungible with physical cash and bank deposits Usable for in-store, online, and person-to-person payments Distributed through commercial banks and licensed financial institutions (two-tier model)

The UAE Government's official CBDC strategy page states that the programme includes developing an "integrated and secure platform including a Digital Dirham wallet designed for ease of use and management, enabling retail, wholesale and cross-border payments, money transfers and withdrawals, top-ups and redemption."

Cross-border capabilities: The mBridge platform is designed for real-time, multi-currency settlement using wholesale CBDCs. For the UAE, this means potential direct central-bank-money settlement corridors with China (via PBOC), Thailand (via BOT), and Hong Kong (via HKMA), as well as Saudi Arabia (which later joined mBridge).

Saudi Arabia: Deliberate Caution

Saudi Arabia's approach to CBDCs has been more measured than the UAE's. SAMA has participated in two major multilateral CBDC initiatives but has not announced a domestic retail CBDC programme:

Project Aber (2019): A joint initiative with the CBUAE, Project Aber explored whether a single, dual-issued digital currency could work for domestic and cross-border transactions between two countries. The project used distributed ledger technology and real money. The findings, published jointly by SAMA and CBUAE, demonstrated that DLT-based wholesale settlement was technically feasible but raised questions about monetary policy implications and governance complexity.

mBridge participation: Saudi Arabia later joined Project mBridge, extending its cross-border wholesale CBDC experimentation to a multilateral context. This gave SAMA direct exposure to the platform's architecture and its implications for cross-border settlement without requiring a domestic CBDC commitment.

Domestic priorities: SAMA's public communications have focused more heavily on domestic payment modernisation through conventional infrastructure - the sarie instant payment system (launched 2021), the mada debit network expansion, and SADAD bill payment system upgrades. Unlike the CBUAE, SAMA has not published a dedicated CBDC strategy document or committed to a retail launch timeline.

Why the Strategies Diverge

Several structural factors explain the different approaches:

Economic model: The UAE's economy is more diversified and service-oriented than Saudi Arabia's. Dubai in particular positions itself as a global financial and technology hub, where being first with a CBDC aligns with the broader national brand. Saudi Arabia's Vision 2030 transformation priorities have been focused elsewhere - on Neom, tourism, entertainment, and industrial diversification.

Existing payment infrastructure: The UAE's domestic payment system (UAEFTS for RTGS, Aani for instant payments) is relatively mature. Adding a CBDC layer is incremental. Saudi Arabia has been more focused on building out sarie instant payments and expanding mada card acceptance - foundational infrastructure work that competes for institutional attention and resources.

Regulatory posture: The UAE has been more permissive toward financial innovation generally, having established the DIFC and ADGM as regulatory sandboxes and licensed multiple crypto exchanges. Saudi Arabia has been more conservative, maintaining stricter controls on digital asset activity. This general regulatory temperament extends to CBDC ambition.

BIS relationship: The BIS stepped back from mBridge in October 2024, handing the platform to its member central banks. This may have reinforced Saudi caution - if the BIS itself has concerns about the platform's governance and its proximity to Chinese financial infrastructure, a conservative central bank might reasonably slow down.

The IMF Perspective

The IMF's 2024 departmental paper on "Central Bank Digital Currencies in the Middle East and Central Asia" provides useful context. The paper notes that MENA countries face a particular set of CBDC considerations:

High cash usage in some markets creates a use case for digital alternatives

Large migrant worker populations drive significant cross-border remittance flows Islamic finance considerations require CBDCs to comply with Sharia principles (the UAE has explicitly stated the Digital Dirham will be Sharia-compliant) Financial inclusion gaps in some countries could be addressed by CBDCs that bypass traditional banking requirements

The IMF paper recommends that MENA central banks proceed cautiously with CBDCs, emphasising that "the decision to issue a CBDC should be driven by country-specific circumstances" and that "the costs and risks of CBDCs should not be underestimated."

Implications for Gulf Payment Infrastructure

For banks operating in the UAE: The Digital Dirham will eventually require integration into core banking systems. Banks should begin evaluating their technical readiness for CBDC settlement, including wallet infrastructure, AML/CFT compliance for CBDC transactions, and treasury management for an additional form of central bank money.

For banks operating in Saudi Arabia: No immediate action is required on CBDC infrastructure. SAMA's current priorities suggest banks should focus on maximising sarie instant payment adoption and mada acceptance rather than preparing for a domestic CBDC that has not been announced.

For cross-border payment providers: The mBridge platform - now operated by its member central banks without BIS involvement - represents a potential future alternative to SWIFT for wholesale settlement in the Gulf-Asia corridor. However, its timeline and scale remain uncertain.

For treasury operations: If the Digital Dirham launches at retail scale, UAE treasurers will need to account for a new form of central bank money in their liquidity management frameworks. Unlike bank deposits, CBDC holdings with the central bank carry zero credit risk but also (by design) zero interest - creating a distinct asset class within cash management.

For compliance teams: CBDC transactions will carry rich data by design - a fundamental difference from cash. Compliance teams should prepare for the surveillance and reporting implications of a fully traceable digital currency issued by the central bank.

What Remains Uncertain

Several key questions are unresolved:

  1. UAE retail timeline: The CBUAE has not published a definitive launch date for the retail Digital Dirham. The programme has progressed through wholesale and government payment pilots, but the retail rollout timeline remains subject to technical readiness and regulatory preparation.

  2. mBridge governance: With the BIS's exit, mBridge governance rests with its central bank members. How this platform evolves - and whether it scales beyond pilot volumes - will determine its relevance for Gulf cross-border settlement.

  3. GCC coordination: Whether the GCC as a bloc will coordinate CBDC strategies, or whether each member state will proceed independently, remains an open question. The precedent of Project Aber suggests bilateral coordination is possible, but a six-country GCC CBDC framework would be considerably more complex.

  4. Impact on AFAQ: The GCC's AFAQ cross-border payment system connects domestic RTGS systems across member states. If CBDCs offer an alternative cross-border settlement mechanism, the strategic rationale for AFAQ could evolve.

Sources: CBUAE - Digital Dirham: A Primer on the UAE's Central Bank Digital Currency; UAE Government - Central Bank Digital Currency Strategy; CBUAE - mBridge; IMF - Central Bank Digital Currencies in the Middle East and Central Asia (2024).