As Bernard Ivezic/Poslovni Dnevnik writes on the 15th of February, 2020, the Chinese are already testing out the digital yuan and are closest to launching their own national digital currency, the European Central Bank has therefore stepped up preparations for the digital euro, and the Fed has asked the US Congress to move in the same direction. Would the introduction of the digital kuna be worthwhile?

Although the Croatian Government is preparing to join the Eurozone and with that replace the kuna with the euro, it is a pity that the Croatian National Bank (CNB/HNB), Hanfa and the Ministry of Finance aren't currently using the heated debate on central bank digital currencies (CBDC) to open up more new business opportunities in Croatia.

According to the current view of the CBDC, the digital kuna should be the same as the normal kuna as we know and love it, only in digital form. Therefore, the CNB would play the same role in its creation as it does with regular coins and notes and ensure its stability. The digital kuna would also be issued in parallel with paper money. Digital kuna, on the other hand, would be easier to use, much like virtual cryptocurrencies such as Bitcoin.

However, the main advantage of the digital kuna would be that transactions with it would be cheaper than they are with cash, so, for example, in tourism, Croatia's major cash-dependent industry, as well as in trade, the CNB and the Ministry of Finance would give entrepreneurs the opportunity to make significant savings because of the high cost of manipulating cash.

European fintechs have already shown that the Croatian market is one of the most desirable in all of Europe when it comes to testing financial innovation. The country receives a significant number of tourists, thus generating an interesting volume, but what helps it is that it is not large in terms of population, so every market experiment here is fairly easy to get under control.

It is important to understand that the digital kuna, euro or dollar would not be the same as Bitcoin, as they would still be entirely managed by central banks, not solely by the law of supply and demand as in the case of cryptocurrencies. Back in January last year, the Bank of International Settlement (BIS) published a report: "Proceeding with caution - a survey on central bank digital currency", stating that more than seventy percent of the world's central banks operate on their own digital currency (CBDC).

Despite the proud title of the report, all central banks have indicated that they're working on the study of digital currencies. Half of them have entered the prototyping phase, with one in ten already spinning some sort of pilot. Mostly, this isn't done in public. Central banks, moreover, are increasingly cooperating on such projects.

The European Central Bank and the Bank of Japan are working together on the Stella project, and the Bank of Canada, the Monetary Authority of Singapore and the Bank of England also have a joint project. The overwhelming interest in digital versions of national currencies has not recently intensified without good reason. Central banks are in awe of Facebook's Libra, which, after losing support from a number of big financial players, is still carrying on strongly. Even Google is worried about it, so it is launching a new chat app, although all of its previous ones disappeared without much notice.

In addition, despite problems with coronavirus over recent weeks, the People's Bank of China has applied for as many as 84 patents for its own CBDC concept. According to financial circles, China is the closest to launching its own national digital currency - the digital yuan. Concerns are growing in the US and in the EU as well, and central banks are now seeking quick answers. In January, the European Central Bank agreed with the central banks of Sweden, Switzerland, Canada, Japan and the United Kingdom to launch a special task force for the CBDC.

It will outline steps towards the introduction of national digital currencies in Washington in April. The initiative was launched after the European Central Bank introduced EuroChain, a prototype of the digital euro. This week, the Fed has asked the US Congress for support to move in this direction, citing the dangers of Libra and the digital yuan. What is left unsaid is that the US does not want the digital euro to appear before the digital dollar.

The leaders of the central banks of France and Germany are divided over the subject of the creation of a digital euro. In Germany, there is a belief that banks should be pressured to improve their payment services in order to cope with the development of crypto services, the emergence of currencies created by social networks, and think that there should be no fear of China. However, the central bank in Germany supports blockchain and is already testing out this technology to offer such services to commercial banks, but not to citizens.

In France, however, they believe that the emphasis should be placed on a national initiative, that is, to start testing the digital euro or, as they call it, the e-euro. They want to enter the first pilot phase by April. The question, then, is why Croatia should not scramble and become an incubator for the future digital euro. If not instead of France, then with France. The digital kuna project could thus become a template for the digital euro.

It would certainly work as a great template for all non Eurozone EU member states, as the digital kuna would at some point be replaced by the future digital euro. It would also become a template for other countries around the world that want their own national digital currencies. There is no lack of IT knowledge for the digital kuna project.

That knowledge, which would thus accumulate in the financial and IT sectors in Croatia, could later become an important export product, further motivating the employees of the Ministry of Finance, the CNB and Hanfa. It would also give perspective to the strong IT operations of banks in Croatia, such as Erste Bank and PBZ, which develop products that are later transferred to other countries within their groupings here.

The benefits of such a project for the future development of the fintech industry in Croatia and job creation in the financial sector, followed by a wave of layoffs in banks due to digital transformation, go without saying.

These are all the reasons why a digital kuna would be worth investigating, and why it would be good for the Ministry of Finance, CNB and Hanfa to find ways to launch this project. Especially now, when Croatia presides over the European Union and when it itself emphasises that it wants to contribute to the Eurozone.

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Don't worry, the Croatian kuna isn't being phased out in time for the euro's introduction just yet, but there are several old Croatian banknotes, some (but not all) of which might look no different to the usual ones you spend, that are actually no longer legal tender in Croatia.

As Poslovni Dnevnik writes on the 15th of June, 2019, the Croatian banknotes you need to be checking your wallets, jacket pockets and the crevices of your sofa are 5, 10, 20, 50, 100 and 200 kuna notes which bear the date of issue as October the 31st, 1993 and January the 15th, 1995, according to vijesti.hr.

While these dates are now a long time ago and you might think that plain old paper banknotes might not have survived for that length of time, it has been reported that as many as nine million and 600,000 kuna worth of kuna banknotes are still in circulation within the country, and as Vecernji list states, it's possible that you have them in your wallet, or under your bed as the case may be.

If you happen to have any of the banknotes mentioned above, you can freely exchange it at the Croatian National Bank (HNB/CNB). In just one year, from the 31st of May, 2018 to the 31st of May this year, the bank received as many as 38,500 of these various now illegal banknotes from people in various denominations.

The 10 kuna bills bearing the issue date on October the 31st, 1993 ceased to be a legal instrument of payment on April the 1st, 2001. Yet according to the data of the Croatian National Bank, as of May the 31st, 2019, as many as 699,153 of these old notes are still in circulation. Of those with the date of issue being January the 15th, 1995, there are stil 2,353,407 out there somewhere.

The 20 kuna banknotes bearing the issue date of October the 31st, 1993 ceased to be legal tender on April the 1st, 2007. There are still 1,735,062 of these banknotes in circulation, even though they haven't been legal tender for a very long time now.

The situation with the other banknotes mentioned above is similar, so if you see that you have any with the date of issue being October the 31st, 1993, make sure to take them to a bank and exchange them for legal notes free of charge.

Invalid banknotes can be delivered by post to the following address: The Croatian National Bank, Treasury Department, Trg hrvatskih velikana 3, 10002, Zagreb, or, they can be taken in person to the Croatian National Bank at Franjo Rački 5, Zagreb, Croatia.

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ZAGREB, May 30, 2018 – Živi Zid leader Ivan Vilibor Sinčić said on Wednesday that his party had sent to parliament for consideration amendments to the Contractual Relations Act and the Foreign Exchange Act to abolish the foreign currency clause in Croatia by December 1.

Banknotes and coins from kiosks, banks and shops were tested for various bacteria.

Special commemorative coin for an important anniversary.

No one but marketing people sees a point in them.

A practical money guide for the tourist in Croatia, including foreign exchange tips, using kuna abroad and information about Croatian coins and banknotes.

The unit of currency in Croatia is the Croatian kuna, which was introduced to the newly independent country in 1994, replacing the Yugoslav dinar at a rate of 1 kuna for 1000 dinar. Kuna literally means 'marten', a throwback to earlier times when the currency of the region was animal skins and marten pelts were considered valuable. One kuna is sub-divided into 100 lipa (which means linden tree).

Foreign Currency Exchange and Buying Kuna

Planning a holiday to Croatia requires some currency management. Kuna can be purchased in foreign banks and at selected bureau de change prior to travel, but the exchange rates tend to be worse than those available on arrival in Croatia.

Croatian banks dispense kuna to foreign cards from their cash machines, but a slightly better rate is sometimes obtainable by buying the currency over the counter with a card. Cash withdrawal per ATM transaction vary from bank to bank, but are in the region of 1,600 - 2,000 kuna. Dollars, Euro and Pound sterling are all widely accepted in the banks for cash exchange. Certain foreign currencies, such as UAE Dirhams, for example, cannot be exchanged.

The most common foreign currency in use in Croatia is the Euro, which can be used instead of the local currency in many cases, especially in the tourist areas on the coast, where bars, restaurants and even supermarkets will accept Euro on request. The exchange rate tends to be slightly lower, however, with 1 euro converted at 7 kuna, whereas the normal exchange rate fluctuates between 7.1 and 7.5.

Using Kuna Outside Croatia

Although the Croatian kuna is not a 'hard' currency as such, it is widely accepted in Western Bosnia, in the ethnically Croat region of Herzegovina. This includes the coastal town of Neum, through which travellers from Split to Dubrovnik must pass - with prices lower in Bosnia, Neum is a good place to stock up on supplies. The generally accepted exchange rate is 4 kuna to the Bosnian Mark, about 10% higher than the rate in the bank.

Croatian Kuna Exchange Rates

The kuna is closely aligned to the euro and the exchange rate between the two currencies rarely moves more than 3% from 7.3 kuna to the euro. The weakening of the pound is reflected in a 2002 exchange rate of 11.5 kuna dipping to below 8 kuna in 2010. It is currently around 8.5. The US dollar fluctuates between 5 and 6 kuna to the dollar.

Croatian Coins and Banknotes

Croatian coins coming in the following denominations - 5, 2 and 1 kuna, and 1, 2, 5, 10, 20 and 50 lipa. A mildly interesting curiosity about Croatian coins is that those minted in odd years are named after plants and animals in Croatian, whereas those in even years are named in Latin.

Bank notes reflect glorious characters of Croatian history, with towns of Croatia on the back (in brackets below):

1000 kuna Ante Starcevic (Statue of King Tomislav and Zagreb Cathedral)
500 kuna Marko Marulic (Diocletian's Palace in Split)
200 kuna Stjepan Radic (The army buiding in Tvrdja, Osijek)
100 kuna Ban Ivan Mažuranic (St. Vitus Cathedral in Rijeka)
50 kuna Ivan Gundulic (Old City of Dubrovnik)
20 kuna Ban Josip Jelacic (Eltz Manor in Vukovar)
10 kuna Bishop Juraj Dobrila (Pula Arena and Town Plan of Motovun)
5 kuna Fran Krsto Frankopanand Petar Zrinski (Old Town Fort in Varaždin)

Using Credit Cards

Credit cards are widely accepted, but they are not available in all restaurants, so you are advised to check before you dine if you plan to pay by card.

We recommend using MyTravelMoney.co.uk for comparing croatian kuna exchange rates. The site updates with live travel money rates every 5 minutes. You can save up to 10% versus buying last minute at the airport bureaus.