Estonia’s Rounding of Cash Policy: Estonia Sends 1- and 2-Cent Coins to Latvia

Estonia is phasing out one- and two-cent euro coins, sending them to Latvia after adopting cash rounding rules in January 2025. Retailers support this for quicker transactions, while higher denominations remain in circulation.

Estonia is phasing out one- and two-cent euro coins by sending them to Latvia, which still uses them, following the introduction of cash rounding rules in January 2025 that make these denominations impractical.

Since January 2025, Estonia ceased issuing these coins, though they remain legal tender. About 10 million have been withdrawn and shipped to Latvia, under a face-value exchange agreement with the Bank of Latvia, providing Estonia with two-euro coins in return. This is cost-effective for both: cheaper than disposal for Estonia and then minting new coins for Latvia.

Retailers welcome the change for faster transactions and fewer errors. Stores must accept one- and two-cent coins (up to 50 coins total per payment) but do not give them as change and often discourage large quantities of small coins, directing such payments to self-service checkouts.

The five-cent coin remains in use, but inflation may eventually reduce its practicality. Discussions are ongoing about replacing the short-lived five-euro banknote (lifespan around one year) with a coin.

The 2025 rounding rule applies only to final cash totals, adjusting to the nearest five cents (up or down; e.g., €13.22 becomes €13.20 or €13.25).

Card payments are exact, rounding policies must be displayed, and small coins can be used for precise amounts. Accumulated coins can be exchanged at banks. Higher denominations (five cents and above) remain fully in circulation.