Published: 25.09.2019 Updated: 28.09.2023

Expert's commentary

Aigars Freimanis, Director, SIA Latvijas Fakti

The August survey reveals that the number of non-cash payments in Latvia continues to grow. According to the survey results, August recorded more than 10 (10.1) non-cash payments on average per capita in a week for the first time since measuring such data. Those payments were made via internet, banking cards or other digital payment instruments.

The number of the respondents who make payments with their smart phones keeps gradually increasing. Approximately 20% of the people in Latvia are using this payment technology, and their share continues to expand steadily every month. It is mostly used by young people, i.e. those aged 15–34.

Zita Zariņa, Member of the Council, Latvijas Banka

The survey conducted by SIA Latvijas Fakti in August 2023 suggests that public support for the idea of withdrawing 1 and 2 cent coins from circulation has grown. Almost half – 49% – of the respondents expressed support for reducing the share of small change, while 46% of the population believed the smallest denomination coins were necessary. Half a year ago, in the survey of February 2023, 41% of the respondents supported the withdrawal of 1 and 2 cent coins from circulation, but 50% expressed the view that these coins should be retained in circulation.

Latvijas Banka has been measuring public mood in this matter since 2016, when the withdrawal of small denomination coins from circulation was backed by 26% – half the current share.

Let me remind you of the heart of the idea – giving up 1 and 2 cent coins would mean the introduction of the rounding rules, i.e. the rounding of the total amount of the purchase, instead of the price. For instance, if the total amount of the purchase were 12.23 euro, the actual amount payable in cash at the cash register would be 12.25 euro. Meanwhile, if the shopping cart contained items worth 12.22 euro, the customer would pay 12.20 euro at the cash register. The experience of other countries suggests that such practice does not affect inflation rates since, in the daily cash transactions, part of the amount is rounded up, while another part is rounded down.

Over time, public support for reviewing the structure of euro coin denominations has risen and there have been active discussions with the institutions and businesses involved in cash circulation explaining this idea and searching for the best solutions for Latvia, its population and businesses

Latvijas Banka has developed a draft law on rounding the total amount of a cash payment. Currently, discussions are underway with the Ministry of Finance and the State Revenue Service as to how the rounding of the total amount of a cash purchase (and not the price of individual items!) might be implemented in practice.


The greatest challenge involves adapting the cash registers and cash register systems to reflect the rounding of the total amount of a purchase in the receipt. Merchants should not only implement the changes in the systems, but also certify them in accordance with the current laws and regulations. This would significantly affect costs and increase the implementation time. Currently, Latvijas Banka, in cooperation with the Ministry of Finance, is looking for the most business-friendly solution to this problem.


The benefits of limiting the circulation of small denomination coins have been discussed often – more convenience for the public and an easier job for cashiers, savings for those involved in the provision of cash circulation, the protection of natural resources and other factors. It will soon become clear how this initiative will be introduced and how it will ease the daily lives of people and businesses. The other Baltic States are also discussing similar changes in the circulation of small change.

So far, one benefit – that to the environment – has received less attention. The European Union and also Latvia have pledged to reach climate neutrality no later than by 2050. To accomplish this, all areas need to transition to solutions facilitating greenhouse gas emission reduction.

Studies suggest that coin production, transport, distribution, use and recycling globally produce 2.1 MtCO2eq greenhouse gas emissions per year, thus contributing to climate change. The most substantial impact on climate is related to the mining of metals needed for coin production.

The use of coins is also related to environmental and economic sustainability. Every year, 80.6% of the issued 1 cent coins and 69.3% of the issued 2 cent coins do not return to circulation in Latvia. This could indicate that part of the coins is lost and may pollute the environment with pathogens found on coins and copper which is potentially toxic to living organisms. It should be noted that minting a 1 cent coin costs more than the actual denomination of this coin, while the production costs of 2 cent coins are practically equal to their denomination. Withdrawing coins from circulation would allow us to limit the impact on climate and the environment as well as reduce the related processing and production costs.

Emīls Dārziņš, expert of modern payments, Latvijas Banka

Interest in and awareness of the digital euro among Latvia's population is increasing. According to the August survey conducted by SIA Latvijas Fakti, more than half of the population (57%) has already heard about the potential introduction of the digital euro in the future. The figure is eight percentage points higher than the one recorded in February 2023. Data suggest that people aged 35–49 are most informed about the digital euro, but those aged 15–24 are least informed. People living outside Riga know more about the digital euro as well as those with a higher education degree and higher income; this still confirms that the most economically active and technologically savvy people are more interested in the digital euro.

On 28 June 2023, the European Commission published two regulatory proposals contained in the Single Currency Package to ensure that every person and business can continue to access and pay with euro banknotes and coins across the euro area as well as to set out a regulatory framework for the issuance of the potential digital euro.

The regulatory framework for the issuance of the digital euro would ensure that the European Central Bank (ECB) would be able to develop and issue the digital euro as a complement to cash if a decision on its necessity is made as a result of the project. It should be noted that the proposal for the regulation is currently at an early stage, and it will be further examined within the trialogue between the decision-making bodies of the European Union (EU).

Meanwhile, the investigation phase of the digital euro project implemented within the framework of the Eurosystem is coming to an end. The Eurosystem is currently producing the summary of the results obtained from the investigation phase to submit it to the ECB's Governing Council which will decide whether to move (or not) to the next phase of the digital euro project – the preparation phase. It is expected that the ECB's Governing Council might take this decision in late October.

It should be emphasised that the potential decision on moving to the project's next phase does not include the decision on the issue of the digital euro. During the preparation phase of the digital euro, the Eurosystem would start broader testing of individual elements of the digital euro as well as would continue working on its functional considerations. The digital euro project is sizeable. Therefore, it requires careful examination and preparation to match the final offer with the initial objectives set by the Eurosystem – to ensure an efficient, accessible and lasting digital payments solution across the euro area.

The digital euro investigation phase was launched in October 2021, and the Eurosystem has been involved in the development of the theoretical framework of the digital euro for the last two years. The key to success of the digital euro project lies with close cooperation among all project counterparties – EU decision-making bodies, market participants as well as society.

Latvijas Banka will continue its work on the digital euro project as well as will inform the public on the project's development and the decisions taken. Please see the section "FAQ on a digital euro" of the ECB's website. It contains a more detailed explanation about the digital euro project, its necessity and contribution.

Ilze Posuma, Member of the Council of Latvijas Banka

The events of the last few years have made us all reflect on how to manage crisis and emergency situations. In this regard, personal and family finances are among the most important concerns. This issue also receives increased attention from the financial sector – Latvijas Banka and credit institutions, as they determine the critical financial services to ensure their availability to every person and institution in Latvia in the event of turmoil as well as advise on how to better protect and manage money and investments.

The survey conducted by SIA Latvijas Fakti in August 2023 confirms that this issue is important for the public. 78% of the respondents acknowledged the significance of the availability of financial services in various emergency situations. Moreover, 76% of the respondents have heeded the advice of the responsible institutions and have saved up enough to last them for at least a few days.

At the same time, asked to provide a self-assessment, only 10% of the respondents considered themselves to be fully prepared for emergencies, while 15% noted that they were overall prepared. 30% of the respondents assessed themselves to be somewhat prepared for such situations. 20% of the respondents were completely unprepared for emergencies and 24% were only slightly better off, i.e. fairly unprepared. It is important to note that elderly people as well as those living in rural regions and those from lower income groups feel less prepared for emergencies.

In cooperation with its partners – the Ministry of Defence, the Ministry of Finance and the banking sector – Latvijas Banka has prepared an information brochure on the availability of financial services and the response in a crisis situation. The brochure serves as an extension of the Ministry of Defence recommendations detailing what to do in case of crisis (72h brochure). In addition, the informational material prepared by Latvijas Banka also specifies the financial services that are to be provided by commercial banks in a situation of crisis, what people can do to better prepare for a crisis situation and what should be kept in mind to protect their money. Everyone can familiarise themselves with the brochure here (in Latvian) and follow its advice and recommendations.

Overall, in crisis situations the financial services will be provided by all Latvian credit institutions whenever possible. Meanwhile, the critical financial services will be provided by the credit institutions with the largest number of Latvian customers and volumes of household deposits:

  • Swedbank AS,
  • AS SEB banka,
  • AS Citadele banka,
  • Latvian branch of Luminor Bank AS.

The critical financial services are as follows:

1) internet banking and mobile app payments which, in a crisis situation, must be ensured for at least 70% of the regular service provision time;
2) payment card payments which, in a crisis situation, must be ensured in full, unless the access to the infrastructure of international card schemes is disrupted;
3) cash withdrawals – 99 ATMs are considered critical and, in a crisis situation, will be prioritised for cash supply.

The survey conducted by SIA Latvijas Fakti also measured people's awareness of the network of ATMs. The absolute majority of people, i.e. 96%, are aware of the ATMs located in the vicinity of their home. Meanwhile, only 4% are informed about the critical ATMs that will be prioritised for cash supply in emergencies. It should be noted, however, that the survey was conducted in August 2023, but the public awareness campaign about the progress made in the field of critical financial services and the future plans took place in September. In light of this, we are hopeful that the public awareness will significantly increase, and we will continue to actively work towards it. Moreover, together with credit institutions, we will keep focusing on the issues people are less aware of, such as cybersecurity, the continuity of the cash cycle and the use of payment facilities in various crisis situations.

Jānis Blūms, Head of the Cash Department of Latvijas Banka

I would like to thank all 400 000 Europeans who participated in the survey about the design themes for the new, third series of euro banknotes. More than 2000 people in Latvia also took the opportunity to give their opinions on each of the seven themes proposed by experts.

As a reminder, people were asked to express their opinions on the following possible design themes of euro banknotes:

  • European values mirrored in nature,
  • European culture,
  • The future is yours,
  • Our Europe, ourselves,
  • Birds: free, resilient, inspiring,
  • Hands: together we build Europe,
  • Rivers: the waters of life in Europe.

The results of the public survey will be a helpful resource for the Governing Council of the European Central Bank (ECB) in choosing the design theme for the next generation of banknotes by 2024. After that, the selection of the potential motifs will begin and a competition for design samples will be held. At that moment, the Europeans will be asked to provide their opinions once again, but this time to help choose specific design samples.

In 2026, the Governing Council of the ECB will decide on the future banknote design as well as the time of the production and issue of the new banknotes.

When launching the public survey, President of the ECB Christine Lagarde said that there was a strong link between our single currency and our shared European identity, and this will be the key element in the design of the third series of banknotes. To ensure that Europeans can identify with the design of the euro banknotes, they will be asked to express their opinions on the new banknotes in each significant stage of the design and introduction process.

The work on the new banknote design is further proof that cash has been, is and will remain contemporary, secure and efficient means of payment. Cash retains a significant role in our lives. At the same time, however, its design as well as the materials and technologies are changing. Not only does this help to further improve banknote security, but it also allows us to be mindful of sustainability and environmental issues and alleviate the day-to-day lives of the visually impaired and blind.

Also in Latvia, we will continue to involve the public in the work on the new design of euro banknotes and inform it about the latest developments, which is of particular importance to businesses operating with cash.

To follow the process of developing the third series of euro banknotes, please visit Latvijas Banka's website under the Section "Future banknotes".