The Bank of Italy issues euro banknotes in accordance with the principles and rules established within the Eurosystem.
As part of the Eurosystem, the Bank produces the quantity of euro banknotes assigned to it, puts them into circulation, withdraws worn notes, takes part in the search for and experimentation of new security features and contributes to the definition of common standards for the quality of the notes in circulation and the fight against counterfeiting.
The Bank of Italy also exercises powers of control over cash handlers (banks and other professional handlers). In the event that the rules are infringed, it may levy pecuniary administrative sanctions and adopt restrictive measures.
Euro coins are minted in Italy by the State Printing Works and Mint on behalf of the Ministry of Economy and Finance, which, in its capacity as the issuing body, ensures that they are distributed nationally through the branches of the Bank of Italy.
The issuance of euro banknotes
On 1 January 2002, the Bank of Italy and the other eleven EU central banks that had adopted the single currency began issuing banknotes and coins denominated in euros in accordance with the principles and regulations that govern the Eurosystem issuance function.
Euro banknotes and coins are legal tender in the euro area which, as of 1 January 2011, comprised 19 of the 28 EU member states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.
Both the European Central Bank (ECB) and the euro-area National Central Banks (NCBs) are legally authorized to issue euro notes. In practice, however, only the NCBs actually issue and withdraw euro notes. The ECB does not have a cash handling division and is not involved in any cash transactions.
The Bank of Italy carries out the issuing function nationwide through its branch network.
At a local level, individual branches provide the system with fit banknotes and remove worn banknotes from circulation via withdrawals and deposits operated by banks and Cash-in-transit companies (CITs) on their behalf.
The principle of non-repatriation of euro notes
Individual NCBs are required to handle all the euro notes present in their respective national systems, regardless of the country that issued them. Under the principle of the decentralized performance of Eurosystem operations, NCBs are responsible for the issuance, destruction and replacement of worn notes.
The issuance of euro coins
The issuance of euro coins, unlike banknotes, is the responsibility of the Member States participating in the Eurosystem, coordinated by the European Commission.
Euro coins are minted in Italy by the State Printing Works and Mint on behalf of the Ministry of Economy and Finance.
Damaged coins can be presented to the branches of the Bank of Italy, which then forward them to the State Printing Works and Mint.
The quality of the notes in circulation
The ECB and the Eurosystem NCBs pursue the objective of ensuring the integrity and good state of the notes in circulation, so as to maintain the public's confidence in euro banknotes.
Banks and other professional cash handlers play an important role in maintaining the quality of the notes issued.
To guarantee the integrity of the notes in circulation, the European Central Bank (ECB) adopted Decision ECB/2010/14 on the authenticity and fitness checking and the recirculation of euro banknotes, which commits professional cash handlers to only recirculating banknotes to the public that have been checked for authenticity and are fit for circulation.
Common NCB tests for recycling purposes
In implementation of the European Central Bank Decision ECB/2010/14, and subsequent amendments, banknotes can only be recirculated if they have been checked by machines that are compliant with the requirements laid down in this Decision.
To this end, NCBs offer the manufacturers of these machines the possibility of testing their capability for checking banknotes' authenticity and fitness, using a common procedure and a common set of banknotes, consisting of a sample of counterfeit notes and of genuine notes, some fit and some unfit for recirculation. The test is free of charge and can be requested at any Eurosystem NCB; the test is valid throughout the entire euro area.
The cash-handling machines referred to in Decision ECB/2010/14 are classified into two categories:
- Customer-operated machines, comprising:
- cash-recycling machines, which take in banknotes, check their authenticity and fitness for recirculation and redistribute them to customers
- cash-in machines, which only allow cash deposits, and accept banknotes and check their authenticity.
Both these types of cash-handling machine must be able to guarantee traceability, i.e. to link the suspect counterfeits to the current account to which they were to be credited.
- Staff-operated machines, comprising:
- banknote processing machines, which check notes for both authenticity and fitness;
- banknote authentication machines, which only check for authenticity.
Both categories of machine must be capable of classifying individual notes as genuine or suspect counterfeits without staff intervention, sorting them automatically, and separating genuine notes into those that are fit and unfit for recirculation.
The ECB website posts the list of machines that have been successfully tested. The tests must be repeated every year.
Manufacturers interested in testing their cash-handling machines should contact one of the NCBs.
NCBs also offer testing for machines that only check the authenticity of banknotes not fit for recirculation. The list of machines that have been successfully tested is published on the ECB website.
Manufacturers interested in having their cash-handling machines tested at the Bank of Italy should contact the test group at the Currency Circulation Management Directorate.