Payment radar

Ilze Posuma, Member of the Council of Latvijas Banka

On the night of 22–23 August 2026, Latvia was hit by one of the most devastating storms in its history. The damage was so extensive that, in some places, repairs to the electricity network continued until mid-September. Shortcomings were identified in a number of areas, prompting the responsible authorities to consider how to strengthen resilience to crises and improve society's preparedness for different situations. How did the financial sector weather the storm, and what lessons can we learn from it?

First, it should be stressed that this was a patchwork crisis – the damage and disruption varied across different parts of Latvia. In some regions, the only signs of a natural disaster were broken branches and the occasional fallen tree. In cities and smaller settlements elsewhere, however, power outages lasted for several days, significantly disrupting everyday life. As a result, on Sunday, 23 August, shops were operating in some places, with people able to pay by card and withdraw cash from ATMs. However, in some locations, a combination of factors made this impossible.

Overall, everyday banking services – such as money transfers, instant payments, and other services, which are normally available on Sundays – continued to operate as usual, at least in areas where electricity and communications were available and customers could access their online banking. During the storm, 183, or around one in five, of the 869 ATMs in Latvia experienced disruptions. This was mainly due to power outages.

Were critical financial services available in such a situation (namely, critical ATMs subject to enhanced requirements for ensuring their continued operation, and offline payments enabling non-cash transactions when communications are unavailable)?

Critical ATMs operate using alternative power sources (for example, a bank provides a diesel generator) and have additional connections to information systems, enabling them to communicate with the bank and dispense cash. Offline payments, meanwhile, work in a similar way to payments made during flights: the retailer must be operating and electricity is required, but a communications connection is not, and the funds are debited from the payer's account later, once communications have been restored.

During the August storm, electricity and communications were disrupted simultaneously, also affecting the operations of retailers and shopping centres. As a result, critical financial services infrastructure was able to provide support and perform its functions only to a limited extent. The most extensive damage occurred early in the night, and following disruptions to the electricity network, communications towers continued operating for only a few hours using autonomous power supply solutions. By morning, their power sources had been exhausted, leaving some areas without either electricity or communications.

This is the key lesson from the crisis at the national level: without electricity and communications, other solutions cannot function either. If retailers cannot operate, critical financial services are also unavailable. How can this be addressed? This requires a national-level solution, with priority potentially given to ensuring the operation of critical communications towers and retailers rather than critical ATMs.

What do the figures suggest about the operation of critical financial infrastructure during the crisis? Several hundred offline payments were made in shops. Most critical ATMs (77 out of 94) remained operational during the crisis, although they were mainly located in areas where no power outages occurred or where outages were resolved quickly. Only a few critical ATMs experienced an outage lasting longer than permitted under the applicable regulations. The main problems were identified with ATMs located in shopping centres, which could not be opened due to power outages and were therefore inaccessible to the public. Banks are assessing each such situation individually. At the same time, it is clear that action is needed to take the lessons from this storm into account.

Latvijas Banka has already drawn the attention of the responsible authorities to issues concerning ATM availability and proposed additional solutions. One such solution could involve essential services centres, where people could buy essential goods in one place, including by making offline card payments, as well as access cash. These centres could, for example, be set up at retail outlets or petrol stations.

They would operate alongside the resilience hubs proposed by the head of the Crisis Management Centre, where people would have access to information, first aid, communications, and other essential services. These hubs would be particularly important in situations where, for whatever reason, the nearest crisis shop would be inaccessible or people would be unable to reach it.

The lessons learned from the storm will help strengthen the country's overall resilience to crises in the coming months. At the same time, Latvijas Banka encourages everyone to continue to act sensibly and plan ahead, including by keeping some money in cash or building up savings specifically for crisis situations. Such an emergency cash reserve should be held in small-denomination banknotes and should be sufficient to cover a family's needs for one week.

It is also advisable to identify the ATMs closest to your home, including critical ATMs, in advance on the website of Latvijas Banka (the map is available here: www.bank.lv/en/services/map-of-atms-in-latvia). Information on offline payments, in turn, is available here: www.bank.lv/en/news-and-events/news-and-articles/news/17790-offline-card-purchases-have-been-introduced-by-10-retailers. It is important to bear in mind that this solution can only be used by physically inserting the payment card into a card terminal and entering the card's PIN.

For more information on critical financial services, see the website of Latvijas Banka: www.bank.lv/en/operational-areas/customer-protection/critical-financial-services.

Jānis Blūms, Head of the Cash Department, Latvijas Banka

First of all, I would like to thank each and every one of the 37 137 people in Latvia who took part in the public survey on the design of the next generation of euro banknotes. Overall, almost 10 million people participated in the survey. People throughout Europe were invited to share their views on which of the proposed designs under two themes – "European culture" and "Rivers and birds" – should be used for future euro banknotes.

In this commentary, I would like to outline the next steps that, following the gathering of the public's views, will lead all the way to the issuance of the first banknote featuring the new design.

The Governing Council of the European Central Bank (ECB), which also includes Mārtiņš Kazāks, Governor of Latvijas Banka, is expected to select one of the design proposals by the end of this year. Work will then begin on adapting the selected design for use on banknotes, incorporating complex, high-tech security features as well as various tactile and colour elements needed both to protect the banknotes against counterfeiting and to assist blind and partially sighted persons.

The development of banknotes is an ongoing race between central banks and counterfeiters, and this is one of the reasons why banknotes are regularly updated and enhanced. The new banknotes are expected to incorporate various modern technological solutions that will make life more difficult for counterfeiters. The existing euro banknotes are already relatively well protected against counterfeiting: across the euro area, 14 counterfeit banknotes were detected per million genuine banknotes in 2025, compared with 18 counterfeit banknotes per million genuine banknotes in 2024.

Designing attractive and secure euro banknotes is only one step in the process. It is important that, when they are issued, they can be used without restrictions: cashiers need to be familiar with the new banknotes, vending machines need to accept them, and the counterfeit-detection equipment used in shops needs to recognise them. Achieving this will require significant work, both to inform professional cash handlers and to reprogramme various equipment. Surely, the introduction of new banknotes into circulation is a national-level event, and it will be preceded by a wide-ranging information campaign.

The new euro banknotes will also follow the "feel, look, tilt" principle (https://www.ecb.europa.eu/euro/banknotes/current/security/html/index.en.html#feel). This will allow anyone to check whether a banknote is genuine. Euro banknotes contain dozens of different features that are difficult to counterfeit, and even if a counterfeiter manages to reproduce one of them, it is very rare to find counterfeit banknotes that successfully replicate several anti-counterfeiting features.

No decisions have yet been taken on the timing or technical arrangements for introducing the new euro banknotes. However, previous experience with the first and second series of euro banknotes allows us to confidently expect that the process will be gradual and carefully planned.

It is also important to remember that, when a new euro banknote design is introduced, people and businesses do not need to exchange their existing banknotes for new ones. The old banknotes retain their status as legal tender indefinitely and are gradually replaced by new-design banknotes as they return to the central bank.

A look back at the history of euro banknotes

How were euro banknotes introduced in the past? Work on the first series of euro banknotes began long before the euro area and the ECB were established. It was led by the European Monetary Institute (EMI), which initiated the development of the euro banknotes in 1994. A design competition was launched in 1996, and on 13 December 1996, Robert Kalina, an artist at the Oesterreichische Nationalbank, was announced the winner with his idea based on the theme "Ages and styles of Europe". The artist's idea featured windows and gateways on the obverse of the banknotes as symbols of openness, and bridges on the reverse as symbols of cooperation and unity.

The following year and a half was spent developing and refining the design of the euro banknotes. In July 1998, the newly established Governing Council of the ECB officially approved the banknotes' final technical specifications, colour schemes, size standards, and security features. In July 1999, the printing of almost 15 billion new euro banknotes began at highly certified European printing works.

The euro banknotes were presented to the public on 30 August 2001, when detailed information about their security features was provided. In the autumn of the same year, banknotes began to be supplied to commercial banks and retailers across the euro area to ensure that cash would be available from the first morning of introduction. On the night of 31 December 2001 to 1 January 2002, euro banknotes officially entered cash circulation in the 12 euro area countries, replacing national currencies during a two-month changeover period.

A different strategy was adopted for the issuance of the second series of euro banknotes. Their design and introduction took place gradually over several years, with priority given to protection against counterfeiting and banknote durability. On 8 November 2012, then ECB President Mario Draghi announced the decision to introduce the second series of euro banknotes, known as the Europa series, and the different denominations were introduced gradually over several years. The 5 euro banknote was the first to enter circulation in May 2013. The redesigned 10 euro banknote followed, entering circulation in September 2014, at a time when Latvia had recently joined the euro area and introduced the euro.

In May 2019, the final two denominations of the Europa series entered circulation simultaneously. This took place six and a half years after the new series had been announced. The process was gradual and caused no problems for businesses or the public as a whole. I am confident that well-considered decisions will also be taken for the introduction of the third series of euro banknotes.

Latvijas Banka is ready for the practical introduction of the new euro banknotes. We will draw on the experience gained during the introduction of the euro in 2012–2014. Particular attention will be paid to communication with professional cash handlers and particularly vulnerable groups in society, as well as to informing the public at large.

I encourage everyone to follow the latest developments from the ECB and Latvijas Banka. Cash is more than a means of payment and a store of value – it is also one of the elements of society's security. We will develop and issue banknotes and coins for as long as demand for them exists in society. Cash has a future!

Zita Zariņa, Member of the Council, Latvijas Banka

This year, the digital euro project has regained momentum, with European legislators finally reaching agreement on a number of widely debated aspects. The next step is the reconciliation of positions in the so-called trilogue procedure – in July, negotiations officially began between the European Parliament, the Council of the European Union (EU), and the European Commission with a view to completing the legislative process for a common regulatory framework for the introduction of the digital euro.

It is hoped that the political negotiations and adoption of the digital euro regulation will be completed later this year, allowing the Governing Council of the European Central Bank (ECB) to take a formal decision by the end of the year and launch pilot projects, with the actual introduction of the digital euro planned for 2029.

In this commentary, I would like to touch on several aspects that will help the public better understand the digital euro project and its impact on our everyday lives.

The digital euro will complement rather than replace cash

The digital euro will be a complementary alternative to existing solutions and a new way of making payments digitally. Just as cash (banknotes and coins), the digital euro will be central bank money. Cash will continue to exist and remain available to people as it is today. Moreover, EU legislators and the ECB are working to strengthen the use and availability of cash.

Europe will have its own public, pan-European payment solution

The introduction of the digital euro will provide Europe with a payment infrastructure based on central bank money and European rules. This will reduce Europe's dependence on payment solutions managed outside Europe and provide an additional solution for people's everyday digital payments. The distribution and use of the digital euro will be supported by European payment service providers, through which everyone will be able to open a digital euro account and make payments.

The digital euro will be intended primarily for everyday payments, not for saving

The digital euro will be a means of payment that can be used in shops, online, and for payments to other people. To prevent it from becoming an alternative to bank deposits and having negative effects on the functioning of banks, a limit will be set on the amount of digital euro that can be held in each customer's account. However, everyone will be able to link their digital euro account to their commercial bank account, enabling them to make payments even when the amount of the desired purchase exceeds the balance in their digital euro account (the shortfall will automatically be taken from the commercial bank account and transferred to the payee).

The digital euro will also be usable without an internet connection

The digital euro is designed to enable offline payments, allowing people to pay each other and make payments to merchants even without an internet or mobile network connection at a particular moment. This will be particularly important in places with poor connectivity and in situations where digital communications are disrupted.

In Latvia, critical financial services, including offline payments, have already been introduced, but such solutions are not widespread elsewhere in Europe, and the digital euro will reduce this vulnerability. In Latvia, it will serve as a backup solution providing greater security.

The digital euro will be designed with particular attention to privacy

When making online payments with the digital euro, the Eurosystem (comprising the ECB and the national central banks of the euro area) itself will not be able to identify the individual user and their payments. The payment service provider, in turn, will have access to the information necessary to process the payment and comply with regulatory requirements. This is similar to how bank accounts operate today.

Meanwhile, offline payments will provide a level of privacy similar to that of cash – only the payer and the payee will know about the specific payment.

The digital euro will also be able to provide an additional payment option in the event of technical disruptions or crises

The digital euro is being developed with the aim of ensuring continuity of payments even in challenging circumstances. Its offline functionality will enable payments to be made even without an internet or mobile network connection. Moreover, the architecture of the digital euro system provides solutions for situations where a particular payment service provider experiences a disruption and is unavailable to process a digital euro payment.