The European Union on Tuesday (July 12) gave its final approval for Croatia to adopt the euro early next year at a signing ceremony in Brussels, making it the 20th member country to adopt it as its official currency.
The European Commission, the EU’s executive arm, had recommended Croatia for approval, saying it meets all the requirements related to inflation and public debt, according to a Bloomberg report.
“A strong and larger euro area reinforces Europe’s influence internationally,” Commissioner Valdis Dombrovskis told reporters after the ceremony, adding that Croatia’s euro adoption “is helping to widen the foundation for Europe’s future economic resilience and strength.”
Croatia will implement the use of the euro at a conversion rate of 7.53450 kuna per euro on Jan. 1, 2023, the EU said in a statement, the same rate as was established in July 2020 for entry into the so-called euro area waiting room, known as ERM-2.
Before Croatia’s approval, Lithuania was the last country to be approved for euro use since 2015.
“Euro area membership will bring us more security, lower risks, increase investment ratings, and raise living standards for our citizens,” said Boris Vujcic, governor of Croatia’s central bank, per the report.
Bulgaria and Romania are seeking to follow Croatia’s lead and be approved for euro use, the report noted.
As part of efforts to update the Eurosystem, since 2020, the European Central Bank (ECB) has been leading talks and consultations on the future of the euro and plans for the introduction of a digital euro.
Related: Like Its Predecessor, The Digital Euro Will Require Security, Mobility
Of course, for many in the eurozone, the EU’s favored currency already feels very digital. Even discounting the contemporary growth of eCommerce in recent years, from Amsterdam to Lisbon, Portugal, digital payment methods are on the rise as people turn from paper and plastic to phones and mobile wallets.
But absent Single Euro Payments Area (SEPA)-wide legislation, the story of the euro’s digitization has been one of workarounds and creative solutions. In bank vaults up and down the continent, immobile stacks of euro notes continue to play an oversized role in the financial ecosystem.
In the ongoing discussion surrounding the eurozone’s transition to digital currency, security is also proving paramount.
For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.
