The Czech koruna: why Czechia kept its own currency

Almost every visitor to Prague asks the same thing within a day: why are the prices in korunas when the country is in the European Union, and can I just pay in euros? The short answer is that you often can, at a bad rate, and that the koruna is a choice the country keeps making rather than an oversight. Behind that choice are about a hundred years of history and a treaty obligation that has been waiting for a date since 2004.

This is an explainer on the currency and the policy framework. It does not argue for or against the euro, and the decision belongs to the Czech government and Parliament.

A currency with a short, bumpy biography

The word koruna means crown, and the Czechoslovak crown was created in 1919, shortly after the republic was founded. The finance minister of the new state, Alois Rašín, had banknotes of the old Austro-Hungarian crown stamped so that the new state controlled its money supply. The currency survived the interwar years better than many.

In June 1953 the communist government carried out a currency reform that confiscated much of ordinary people's savings. It sparked unrest in Plzeň. The episode is still remembered as a lesson in how a state can seize wealth, and it colours older Czechs' attitudes to money, banks and government promises.

After 1989 the crown was devalued, made convertible and pegged to a basket of currencies. The Czechoslovak monetary union did not outlive the country. After the split on 1 January 1993, Czechia and Slovakia shared the currency for only a few weeks, and on 8 February 1993 they separated it. Banknotes were stamped as a transitional measure, then new notes and coins were issued. A koruna is divided into 100 haléř, but haléř coins were withdrawn from circulation in 2008, and the smallest coin today is one koruna.

What is in your wallet

The notes are 100, 200, 500, 1,000, 2,000 and 5,000 korunas, and the coins are 1, 2, 5, 10, 20 and 50. The banknotes carry portraits of historical figures. The 100-koruna note shows Charles IV, whose city this is, as our piece on Charles IV and Prague describes. The 5,000 note shows T. G. Masaryk, the first president of Czechoslovakia. The Czech National Bank issues the money and publishes the security features of each note on its website.

Why not the euro?

When Czechia joined the European Union in 2004 under the Accession Treaty, it agreed to adopt the euro once it meets the convergence criteria. Unlike Denmark and, at the time, the United Kingdom, it did not negotiate an opt-out. But the treaty set no date.

The criteria are laid down in the Maastricht Treaty: stable prices, sound public finances, a stable exchange rate, which in practice means taking part in the exchange-rate mechanism (ERM II) for at least two years without tension, and low long-term interest rates. Czechia has not joined ERM II. Governments floated target dates in the 2000s, then dropped them, and none is set now. Reasons offered by supporters of waiting include the value of an independent monetary policy, concern about the stage of convergence and a wish to see the euro area's institutions settle. Supporters of earlier adoption point to lower transaction costs and exchange-rate risk for a very open, export-heavy economy. Both camps are serious, and surveys have tended to show scepticism among the public.

Living with two currencies

On a practical level the koruna is the only legal tender, but some shops, hotels and restaurants, especially in the centre of Prague, will accept euros. They set the rate, and it is rarely favourable. A café that says "1 euro = 25 CZK" is giving itself a margin. Card payments are common almost everywhere, and the better option is usually to pay by card in korunas and decline any offer to convert the price into your home currency. That offer, known as dynamic currency conversion, hides a margin in the exchange rate.

Cash exchange offices vary a great deal. Those with signs showing a rate without commission often make their money through a poor buying and selling spread, and some operate in tourist areas on the basis that few visitors will compare. Banks and ATMs generally give a better deal. The CNB publishes a daily reference rate, which is a useful benchmark to compare against whatever you are offered.

The koruna abroad

Outside Czechia the koruna is a minor currency, and exchange counters at foreign airports and railway stations often give poor rates for it. If you travel with leftover banknotes, change them at a bank in Czechia before you leave, or keep them for the next visit. The reverse also applies: if you are arriving, a withdrawal from a bank ATM in korunas or a card payment in korunas is usually a better route than changing cash at an exchange counter on arrival.

What it means for residents and employers

For people paid in korunas and spending in korunas, the currency is invisible. For people paid in euros or dollars and spending in korunas, the exchange rate matters. A weakening koruna raises the cost of imported goods and fuel and helps exporters, while a strengthening one does the opposite. That is why many foreign employers quote salaries in euros or hold a currency clause in contracts.

Salaries for work in Czechia are normally agreed and paid in korunas, and some employers quote or index pay in euros, so read what the contract actually says. The wider context is in our guide to how a Czech employment contract works.

Euro adoption in practice

If a date were ever set, the process would run for years. The government would need to take Czechia into ERM II and keep the koruna stable against the euro within a band for at least two years. Parliament would pass laws on conversion. Shops would display dual prices. The CNB would become part of the euro system and lose its separate monetary policy to the European Central Bank. Other countries that have joined recently, such as Slovakia in 2009 and Croatia in 2023, followed that path and provide a template.

The current stance is one of watching. No date is set, and the criteria are monitored. At least every two years the European Commission and the European Central Bank publish convergence reports on every EU country that has not yet adopted the euro, and the CNB and the Ministry of Finance publish their own regular assessments of how closely the Czech economy moves with the euro area. Those documents are the place to look for a sober account of where Czechia stands against each criterion, including the ones it meets and the ones it does not.

The argument for waiting or for going will carry on in the meantime. To follow the question, read the official reports, not the commentary, and note who is quoting which criterion.

Frequently asked questions

Is Czechia required to adopt the euro?

In principle yes, under its Accession Treaty. But the treaty sets no date, and entry depends on meeting the convergence criteria and on a national decision to join ERM II.

Can I pay in euros in Prague?

Some places accept them, but the koruna is the only legal tender and the rate is the seller's choice. Paying by card in korunas is usually cheaper.

Who prints the money?

The Czech National Bank issues banknotes and coins.

What happened to haléř coins?

They were withdrawn from circulation in 2008. Prices can still be quoted in haléř, but cash payments are rounded.