European Currency Unit (ECU)

The European Currency Unit (ECU) was an artificial currency used by the European Economic Community (EEC) for cross-border accounting purposes until it was replaced by the euro fiat currency.

As a currency basket, the value of the ECU was determined by the weighted average of the values of individual EEC member country currencies.

The rate at which the ECU traded against national currencies of EEC member countries was used to determine the price of the euro when it became the official currency of the European Union (EU).

First introduced in 1979, the ECU replaced the European Unit of Account. It served as the basis of interbank rates used for settlements in the currencies of EEC member countries. With the exception of a 5 ECU commemorative coin which was accepted as legal tender in Belgium, the ECU was never put into circulation as a fiat currency.

More on this topic:
Swiss forex trading platform comparison