Glossary:European currency unit (ECU)
The European currency unit, abbreviated as ECU, was the former currency unit of the European Communities, from its adoption on 13 March 1979 (replacing the 'European Unit of Account') to its own replacement by the euro on 1 January 1999, at a ratio of 1:1. The ECU was composed of a basket of currencies of the European Communities Member States and it served as the standard monetary unit of measurement of the market value/cost of goods, services, or assets in the European Communities, thus constituting the cornerstone of the European Monetary System (EMS).
Apart from the official role in the EMS, a private market for the ECU also developed, allowing its use in monetary transactions and for denominating financial instruments including bonds. A major advantage for investors was that securities denominated in ECUs made foreign diversification possible without reliance on the currency of a single country.
Unlike the euro, the ECU was only an electronic unit of account without any official coins or notes that could be used for cash transactions.