In 1998, the European Union agreed upon a single currency called the euro.
The decision was part of Economic and Monetary Union, a long-planned effort to coordinate European economies and monetary policy. The Maastricht Treaty, signed in 1992, established the framework for a future common currency, while the European Council’s May 1998 decision selected the first 11 countries ready to adopt it.
The euro became the official currency for those countries on January 1, 1999, initially for electronic payments, accounting and financial markets. Euro banknotes and coins did not enter everyday circulation until January 1, 2002. The earlier European Currency Unit, or ECU, was an accounting basket of national currencies rather than a physical currency.
A common mix-up is saying the euro replaced every EU currency at once. Several EU members did not initially join the euro area, and some still use their own currencies. The euro’s name had actually been agreed upon in 1995, before the 1998 launch decision.