The euro as the official currency
The euro is the official currency of 21 European Union countries which collectively make up the euro area, also known as the eurozone.
Some EU countries are working to meet the criteria required to join the euro area, while Denmark has opted not to participate.
Within the euro area, the euro is the only legal tender. This means that in the absence of a specific agreement concerning the means of payment, creditors must accept payment in euros.
However, parties may also agree to transactions using other official foreign currencies (e.g. the US dollar). They may also agree to use privately issued ‘money’ like local exchange trading systems (e.g. voucher-based payment systems) or virtual currencies (e.g. Bitcoin).
These private and business transactions are still subject to taxation law, business law, anti-money laundering law and other general commodity trade rules. However, currencies which are not official in the euro area are not governed by monetary law.
The legal tender status of the euro is defined in EU law, namely
- Article 128 (1) of the Treaty on the Functioning of the European Union (TFEU) that covers euro banknotes
- Article 11 of Regulation EC/974/98 that applies to euro coins.
Digital euro
The European Central Bank is working with the national central banks of the euro area on the potential issuance of a digital euro. The digital euro would be a public digital means of payment available free of charge anywhere in the euro area. It would complement banknotes and coins, by giving people an additional choice for their daily payments.