The euro was launched on 1 January 1999, when it became the currency of more than 300 million people in Europe. For the first three years it was an invisible currency, only used for accounting purposes, e.g. in electronic payments. Euro cash was not introduced until 1 January 2002.
Today, euro banknotes and coins are legal tender in 19 of the 28 Member States of the European Union, including the overseas departments, territories and islands which are either part of or associated with euro area countries. These countries form the euro area. The micro-states of Andorra, Monaco, San Marino and Vatican City also use the euro, on the basis of a formal arrangement with the European Community.
Estonia became a member of the Eurosystem on 1 January 2011, when the euro was introduced as the sole legal tender of the country.
In addition, the euro area comprises Belgium, the Netherlands, Germany, France, Italy, Ireland, Austria, Finland, Spain, Portugal, Luxembourg, Greece, Slovenia, Cyprus, Malta, Slovakia, Latvia and Lithuania.
Since the introduction of euro cash in 2002, the value and the number of euro banknotes in circulation have risen steadily. Cash is by far the most widely used means of payment for retail transactions in the euro area in terms of the number of transactions, although in terms of value it has a significantly smaller share. In both respects, however, the role of cash has been gradually declining in recent decades, while the use of debit and credit cards has been growing, a trend that is expected to continue.
As a payment instrument, cash has some unique features:
- it is the most widely usable and fastest payment instrument for retail transactions and it is the most important contingency payment instrument
- it is considered the cheapest instrument for small retail payments – the average overall cost per transaction for small payments is lower for cash than for comparable electronic payment instruments
- it is “inclusive”: people who have no bank accounts or limited access to them or who are unable to use electronic forms of payment can still make payments
- it enables people to keep a close check on their spending
- it is both a payment instrument and a store of value
- it has proved to be secure in terms of fraud/counterfeiting resistance
Notes and coins
- BanknotesEesti Pank makes sure that there is sufficient good-quality money available in Estonia and works with the European Central Bank and other central banks in the euro area to release euro banknotes and coins into circulation.
- Coins for circulationThe euro coins have a national side and a common side, and each country can put its own national design on the national side. All euro coins are legal tender throughout the euro area.
- Collector coinsCollector coins are minted from precious metals to celebrate very important people and events. They are legal tender, but their high value means they are more usually used as souvenirs and collectors items than as circulation coins.
- CounterfeitsAnybody can verify the authenticity of a banknote easily if there is a suspicion that it is counterfeit by just feeling it, looking at it and tilting it, checking the security features, or comparing it to an authentic banknote. If it is suspected that a banknote is counterfeit, the police should be informed.
- To professional cash handlersCompanies can return banknotes into circulation only once the notes have been tested to European standards. Companies can test cash using specially designed devices or, if they do not have any, manually.