Dirham takes a quantum leap

The United Arab Emirates (UAE) currency, the dirham, has acquired a symbol of its own, the English letter D with two horizontal lines across it symbolising stability. According to Emirates News Agency, WAM, “The design is also a nod to the UAE flag, symbolising national pride and resilience.”

It has also become a digital currency, and the symbol is that of the dirham’s new symbol, D crosses with horizontal lines now in a circle in the national colours of green, red and black. This double development reflects the UAE as an important global financial market with a visible symbol of its own as well as digital presence and a digital symbol.

The Central Bank of the United Arab Emirates (CBUAE) decision to launch the digital dirham is part of the Financial Infrastructure Transformation Programme launched in 2023. CBUAE governor Khaled Mohamed Balama said, “We are proud to unveil today the new symbol for the UAE’s national currency and the design of the digital dirham wallet.”

He also explained the importance of digital dirham: “The digital dirham, based on block chain technology, is expected to enhance financial stability, improve inclusion, increase resilience, and help combat financial crime.” The other advantages of the digital dirham, according to CBUAE governor is that it will open up prospects of innovation in the financial sector by creating new digital products and services, decrease costs of transactions and increase access to international markets.

The UAE has moved into a pivotal position of a global financial hub, a bridge between the proverbial east and west. This has also strengthened the position of the Middle East markets with a financial centre of its own. Before the civil war broke out in Lebanon in 1976, Beirut was considered the financial centre of the region, but the sectarian strife had destroyed all the stability and prosperity.

The UAE has gradually emerged as the financial hub because of its openness to global trade in goods and services. It has moved into the key position of a financial centre by creating the institutional framework, the legal basis, and the principles of fairness and transparency which inspire trust among the traders from all over the world.

The UAE has held on to open economy outlook over the years because of political stability and constitutional basis. Unlike many other places in Asia, the UAE was not swept off its feet by fashionable trends. It has firmly held on to its cultural and social values. The UAE society is exposed to international trends but it stands firmly on its own feet, economically and socially. So, between London and Shanghai, the UAE serves as the mid-point of global trade in money, goods and services.

The UAE could not have this enviable position in the global market system if it did not embrace the technological changes that were happening in international transactions. But the laws are strict enough to deter financial crimes.

The CBUAE is the first in the Arab region to adopt the FX Global Code. The FX Global Code encourages best global practices and ethical standards in the foreign exchange market. The adoption of FX Code enhances the UAE’s commitment to “integrity and transparency in financial dealings”. This development has not come about in a hurry.

The leadership of the country displayed vision and commitment to stay with the vision. The global financial hub position of the UAE is not something that benefits only the UAE. It benefits the whole of the Middle East. This is no mean achievement because the Middle East has been simmering with security and political unrest. It needed a calm harbour and the UAE is proving to be that calm harbour where business can thrive in an inter-connected world.