This is one of the core provisions of the monetary law which will apply to the Member States which will adopt the euro at the beginning of Economic and Monetary Union. The first regulation addresses the status of the euro as the single currency and the status of the former national currencies during the transition period between 1 January 1999 and no later than 31 December 2001. The euro will become the currency of the participating Member States on 1 January 1999 and will replace their respective national currencies. The national currencies will cease to exist, in a legal sense, as currencies in their own right. Nevertheless, as euro banknotes and coins will not be immediately available, it must be ensured that economic agents may still use national currencies during the transition period between 1 January 1999 and 31 December 2001, at the latest.
Parties are free to choose the unit they prefer in contractual relationships.
On the other hand, all acts to be performed under a contract must respect the chosen denomination - either the euro unit or the national currency unit. That means that if, for example, a contract is set up in Luxembourg francs all invoices and statements of accounts are to be made in Luxembourg francs, unless parties agree on something different. An exception to this principle applies to payments by crediting an account. The authorisation of the account holder is not required. Another exception applies to organised markets, e.g. stock exchanges may take measures to adopt a specific unit of account.