The euro is the single currency shared by the European Union's Member States having adopted the euro. Some EU Member States are either not participating (Denmark and the United Kingdom through 'opt outs') or have not adopted the euro yet because the convergence criteria to join the euro are not met.
What characterizes official currencies including the euro is that they consist in a monetary system designed and controlled by a state or, as regards the euro, by supranational structures and that where payment obligations exist, acceptance of the very currency is mandatory to discharge from payment obligations.
Within the euro area, only the euro has the status of legal tender. This results from the fact that the money used in a monetary system does only have the status of legal tender if it is provided for under the respective monetary law. In the euro area, Article 128 (1) TFEU lays down the legal tender status of euro banknotes, and Article 11 of Regulation EC/974/98 on the introduction of the euro does accordingly with regard to euro coins. This mean that in the absence of an agreement of the means of payment, the creditor of a payment obligation is obliged to accept a payment made in euro which subsequently discharges the debtor from his payment obligation.
Yet, contractual parties are free to agree to use in transactions other official foreign currencies with legal tender status in the state of issuance, e.g. the Pound Sterling or the US Dollar. The same applies to privately issued money like local exchange trading systems (e.g. voucher-based payment systems in certain communities) or virtual currency schemes (e.g. Bitcoin). Although these are not official currencies and have no legal tender status, parties can agree to use them as private money and without prejudice to the official currency (euro or national currency) being the sole legal tender. In that way, these forms of private money can be considered as economic assets. Private money transactions and business related to them are subject to the general rules of commodity trade such as taxation law, business law, anti-money laundering law or others. However, they are not official currencies and they are not governed by monetary law.
Although euro area Member States share a single currency, interpretations of what its legal tender status means may still differ across countries. The purpose of this Commission recommendation is to define common guiding principles that have concrete implications in the daily lives of European citizens.
Since the introduction of the euro, the status of legal tender of euro banknotes and coins has been a European matter. However, beyond the basic principles set in the Treaty and in the Regulations, the various pre-euro national principles continue de facto to shape the concrete effects of the legal tender of the euro in the participating Member States.
>> Press release IP10/331. Commission adopts a recommendation on the scope and effects of legal tender of euro banknotes and coins
>> Official Journal L83 of 30 March 2010. p 70. Commission recommendation on the scope and effects of legal tender of euro banknotes and coins
>> Memo 10/92. Frequently asked questions. Legal tender of the euro: Q&A on the new Commission recommendation
>> Report. Euro legal tender expert group (ELTEG). Definition, scope and effects of legal tender of euro banknotes and coins
The sometimes very diverse situations across Member States may be a source of confusion for the European citizen willing to pay with euro cash. This may lead to questions such as:
Therefore, the purpose of this Commission recommendation is to give citizens guidelines on such issues with direct implications on their daily lives. These guidelines are based on 10 guiding principles:
The recommendation is the follow-up of the work carried out in 2009 by an ad-hoc group of experts co-chaired by the Commission and the European Central Bank, which gathered representatives of Ministries of Finance and National Central Banks of all euro-area Member States.