Estonia will gradually eliminate one-cent and two-cent Euro coins from circulation.
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Starting from 1 January 2025, Estonia is joining six other eurozone countries in phasing out the use of 1 and 2-cent euro coins in physical stores. This move makes Estonia the seventh country to adopt the rounding rule, which aims to reduce the circulation of these coins.
According to the Bank of Estonia, the new law means shopkeepers no longer have to give out 1 and 2-cent coins as change, as people rarely use them for payments. Shops will no longer have to stock these coins, leading to less inventory management hassle and potential cost savings.
The rounding rule will apply to cash transactions in stores, meaning the final price will be rounded to the nearest five cents. For example, if the total comes to €1.27, the customer will pay €1.30. The prices of individual goods and services will not be rounded, so this rule won't lead to inflation. However, customers may pay slightly more or less due to the rounding policy depending on whether the total is rounded up or down.
Transactions made with bank cards, smart devices, gift cards, or transfers won't be rounded. If customers wish to pay using 1 and 2-cent coins, shops are still required to accept them. The law mandates that shopkeepers can accept up to 50 euro coins at one time, regardless of their value.
Countries like Finland, the Netherlands, Ireland, Italy, Belgium, and Slovakia already apply the rounding rule. Lithuania will follow suit from May 2025. This change simplifies cash transactions and aligns with broader trends in reducing cash usage in favor of digital payments.
If you're still hanging onto your stash of 1 and 2-cent euro coins, remember they'll remain legal tender in Estonia. But, you might find their use less necessary in the coming years!
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Enrichment Data:Estonia is joining other eurozone countries, including Finland, the Netherlands, Belgium, Ireland, Italy, Slovakia, and Lithuania, in phasing out 1 and 2-cent euro coins by 2025. The rounding rule simplifies cash transactions for shopkeepers by eliminating the need for small coins and reducing errors, inventory management costs, and compliance requirements. Consumers may experience slight variations in costs due to the rounding policy, but enjoy the convenience of not having to deal with small coin denominations. The shift towards digital payments is likely to gain momentum as a result of this change.
- In 2025, shopkeepers in Estonia, similar to their counterparts in countries like Finland, the Netherlands, Belgium, Ireland, Italy, Slovakia, and soon Lithuania, will no longer have to stock 1 and 2-cent euro coins due to the rounding rule, which is aimed at simplifying cash transactions.
- Despite Estonia joining other eurozone countries in phasing out 1 and 2-cent euro coins, these coins will still be legal tender and could lose their practicality in the coming years.
- Regardless of their value, shopkeepers in Estonia will be required to accept up to 50 euro coins at a time, as mandated by the new law.
- Financial analysts suggest that the shift away from cash transactions and towards digital payments like bank cards, smart devices, and transfers is likely to be accelerated due to the introduction of the rounding rule in Estonia.
- Businesses across Estonia, regardless of their size, are encouraged to adapt to this change and update their inventory management systems, embracing the convenience that digital payments can offer and aligning with broader trends in the finance sector.
