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The adoption of the euro will bring regulatory scrutiny, dual-currency obligations and new operational risks for banks and payments firms, requiring proactive monitoring, reporting and customer engagement.
On January 1, 2026, Bulgaria became the 21st country to join the eurozone, with the aim of strengthening its economy and boosting growth.
For those operating in the financial sector, this development is expected to support smoother cross-border payments within the eurozone. It will also benefit Bulgarian banks, which will gain access to European Central Bank (ECB) support in the event of a crisis.
During and prior to 2025, in preparation for joining the euro, Bulgaria implemented several measures to demonstrate its readiness, including meeting the four nominal convergence criteria and ensuring that its legislation is compatible with the requirements of the Treaty on the Functioning of the European Union and the Statute of the European System of Central Banks and of the ECB.
On July 8, 2025 the Council of the EU approved the following legal acts:
- Council Decision (EU) 2025/1407 on the adoption of the euro by Bulgaria on January 1, 2026.
- Council Regulation (EU) 2025/1408 amending Regulation (EC) 974/98 on the introduction of the euro in Bulgaria.
- Council Regulation (EU) 2025/1409 amending Regulation (EC) 2866/98 on the conversion rate to the euro for Bulgaria.
These acts confirmed the Council of the EU’s formal approval of Bulgaria’s accession to the euro area on January 1, 2026 and determined a Bulgarian lev conversion rate of 1.95583 per euro.
Practical implementation
Throughout January 2026, there will be a period of dual circulation of the lev and the euro, with both currencies having the status of legal tender.
During this one-month period, although cash payments may be made in both levs and euros, change may be returned only in euros. Only in the event of a temporary lack of euro coins and euro banknotes may change be returned in levs.
After this period, the euro will be the sole legal tender in Bulgaria.
Since August 8, 2025, all retail prices have been required to be displayed in levs and euros. This obligation runs until August 8, 2026.
The requirement for dual price display applies to entities supervised by the Bulgarian National Bank (BNB) with regard to the tariffs for fees and commissions for the financial services they provide and to entities supervised by the Financial Supervision Commission with regard to the amount of fees and commissions for the financial services they provide.
This requirement therefore applies to payment service providers (PSPs), which must present the fees and commissions they charge in both levs and euros during the period of dual display of prices.
Information on applicable fees and commissions must be disclosed in PSPs’ offices and on their websites, and provided free of charge on paper or on another durable medium upon request by a customer.
During the euro conversion period, the obligation to disclose fees and commissions free of charge and across all customer-facing channels creates heightened operational risk for PSPs.
In particular, the mandatory dual display of amounts in BGN and EUR, the application of the fixed conversion rate and prescribed rounding rules, and the need to ensure simultaneous updates of digital, in-branch and paper-based disclosures increase the risk of inconsistencies or errors.
Given the expected increase in supervisory and consumer scrutiny during Bulgaria’s euro changeover, even minor shortcomings in fee disclosure may translate into compliance, conduct and reputational risks.
Banks will provide exchange of levs into euros until December 31, 2026 and the BNB will do so for an indefinite, undisclosed period. Exchanges at banks must initially be offered free of charge, although they may begin charging from July 1, 2026.
The removal of BGN/EUR conversion revenues and the temporary prohibition on charging for exchanges may compress margins and encourage PSPs to rebalance pricing across other services once charging is permitted from July 2026, raising conduct and supervisory considerations.
Euro adoption is also expected to accelerate the shift to euro-area pricing norms for domestic and cross-border payments, intensify competitive pressure from EU-based PSPs and reduce scope for local pricing differentiation.
These effects may be felt disproportionately by smaller PSPs, which face relatively higher migration and compliance costs and have less capacity to absorb short-term revenue losses, potentially contributing to increased market consolidation.
Impact on payment systems
With the introduction of the euro as the national currency, Bulgaria’s real-time gross settlement payment system in levs (RINGS) will cease to function.
Payments in levs previously made via RINGS will be processed as payments in euros in the consolidated TARGET services platform, which already includes domestic banks and some branches of foreign banks.
In addition, customer payments in levs currently made through the payment system operated by BORICA AD, including budget payments, will migrate to the Single Euro Payments Area (SEPA). The move will be implemented in accordance with the technical and business requirements set out in the applicable European acts.
The BORICA payment system will transition to processing payment transactions in euros initiated via payment cards, joining the consolidated platform for TARGET services.
Although Bulgarian banks already participate in TARGET, the migration of lev payments from RINGS to euro settlement in the consolidated TARGET services platform may give rise to areas of operational and liquidity friction.
In particular, the shift to full euro-denominated settlement requires participants to adjust intraday liquidity management practices, collateral arrangements and contingency procedures, which may pose challenges for institutions with more limited euro liquidity buffers.
The transition also increases reliance on the highly integrated TARGET infrastructure, heightening exposure to common operational incidents and reducing the scope for national-level fallback arrangements.
As a result, even well-established participants may face elevated operational risk during the migration and early stabilisation phase.
Following the initial conversion of all BGN account balances to euros on January 1, 2026, credit institutions and PSPs should now focus on post-conversion monitoring and operational controls to mitigate residual risks.
This includes reconciling accounts to ensure accurate application of the fixed conversion rate and rounding rules, tracking and addressing complaints or fee disputes, and ensuring staff are prepared to explain any residual discrepancies to customers.
Boards and senior management should review management information on account anomalies, system errors, complaint volumes and liquidity impacts to identify trends and ensure timely corrective action.
Ongoing oversight of third-party systems, euro-denominated tariff updates, and staff readiness will be critical to maintaining customer confidence and compliance during the early months of the euro transition.
Next steps
A designated website has been established where citizens and businesses can stay informed on the transition.
The Chairman of the Consumer Protection Commission, Alexander Kolyachev, and the Executive Director of the National Revenue Agency, Hristo Markov, have confirmed that they will be monitoring strict compliance with the Euro Adoption Law.
