Adoption of euro cash

Updated: 24.07.2010

During the period of dual circulation, starting from the €-Day, payments can be made in kroons or euros. Change shall be usually given in euros, facilitating the removal of kroons from circulation.

Although kroon payments are possible during the period of dual circulation in shops, the retail distribution network should not be used for changing large amounts of kroon coins. No enterprise, except credit institutions and Eesti Pank, is obliged to accept coins in amounts exceeding 20 kroons during the dual circulation period. Kroon banknotes must be accepted without any limitations. For collection of coins, a separate campaign will be arranged in the second half of 2010. This will be carried out by the Estonian Banking Association together with commercial banks and Eesti Pank.

Having two cash registers complicates the work of salespersons and cashiers and can result in longer queues. It can be assumed that the cash demand of stores and service companies is higher, especially during the first days of dual circulation, and therefore the stocks of euro cash should be sufficient.

 

Timely preparations ensure fluent transition.

From the year 2003, Eesti Pank has made preparations for securing that receipt, storing and handling of euro cash as well as removal from circulation, storage, counting and disposal of kroons would be efficient and secure.

The currency changeover comprises two equally essential logistical tasks – distribution of euros and removal of kroons from circulation. Removal of kroons from circulation will be launched with the campaign for collection of coins to reduce the workload during the changeover period. In addition, credit institutions are planning campaigns to encourage people to deposit as much of the cash held at homes as possible.

During the changeover period kroons, will be returned through the retail network and bank offices. During the period of dual circulation, the main load of cash transportation falls on the transportation of kroons. The security of cash transportation will be ensured on the basis of an integrated plan devised by a task force formed at the Ministry of the Interior.

Merchants and other major cash handlers have to prepare for the period of dual circulation before the €-Day and to ensure, in cooperation with their banks, sufficient reserves of euro cash. In case of frontloading and sub-frontloading principles, the following circumstances have to be taken into account:

• The frontloading of credit institutions with euro coins will take place up to four months before the €-Day and frontloading of banknotes up to one month before the €-Day. The aim is to spread the transportation load and to secure prompt circulation of euro money all over Estonia.

• Credit institution may sub-frontload euro coins to major clients up to four months before the €-Day and banknotes up to one month before the €-Day.

• Credit institutions may sub-frontload small enterprises with euro coins and banknotes in the maximum amount of 10 000 euro under a simplified procedure up to five days before the €-Day. For companies with 10 employees or less and with the maximum annual turnover of 2 million euros, a simplified procedure is applied.

• The condition for frontloading and sub-frontloading euro banknotes and coins is that they shall not be distributed to the wider public before the €-Day.

Naturally, companies are not obligated to use the opportunity of sub-frontloading, as euro cash will be available from ATMs and kroons can be changed into euros in bank offices as well. However, this could mean longer queues and waiting times during the period of dual circulation and, therefore, companies, in cooperation with their credit institutions, must provide an early estimation of what is the best solution for them.