Croatia introduces the euro, the Croatian National Bank enters the Eurosystem
The euro entered circulation in Croatia today, bringing the number of European Union (EU) member states that use the single European currency to 20.
With Croatia’s entry into the euro area, the Croatian National Bank, the country’s national central bank, becomes a member of the Eurosystem. The central banking system of the eurozone consists of the ECB and the national central banks of the countries whose currency is the euro.
The Croatian National Bank also becomes a full member of the Single Supervisory Mechanism, although Croatia has been part of the framework for close cooperation since October 2020. As a result, the ECB is currently responsible for the direct supervision of five significant institutions in Croatia and for the indirect supervision of 16 less significant institutions. As part of its supervisory tasks, the ECB is also responsible for the authorization of credit institutions and the assessment of purchasers of qualifying shares in all institutions. The Croatian National Bank already has a representative on the Supervisory Board of the ECB.
The Croatian National Bank paid the remaining amount of the stake in the capital of the ECB and transferred its stake to the ECB’s foreign exchange reserves. Croatian counterparties in the Eurosystem meet the conditions for participation in the ECB’s open market operations from January 1, 2023. The list of credit institutions and branches of credit institutions based in Croatia that are subject to mandatory minimum reserves will be published on the ECB’s website in in the near future, together with the lists of branches of Croatian credit institutions located in other member states of the European Union where the euro is already in use. On October 28, 2022, the ECB published transitional provisions on minimum reserve requirements. Assets held in Croatia that meet the necessary conditions will be added to the list of eligible Eurozone collateral.
With the entry of Croatia into the eurozone as the 20th member, the system of rotation of voting rights in the Governing Council of the ECB was updated, in which the rotation is organized according to the calendar.
As a consequence of Croatia’s accession, the registration of the capital of the Eurosystem also changed.