Based on the government decision taken in October 2006 the euro in the Czech Republic will be adopted in a single step, also known as the Big Bang scenario. This approach consists in simultaneous switch to using the euro currrency both in cash and non-cash transactions.

The Big Bang scenario was selected because of its favourable characteristics:

• It is clear and well understood to all involved parties.
• It fits into conditions where the euro already exists and represents a well-known and widespread currency.
• It is the cheapest in terms of costs incurred but it is also more demanding from the point of view of coordinating numerous activities in public and private sectors.  It allows to benefit from the Czech experience with the currency split in 1993.

The Big Bang itself is a part of a complex process of euro adoption in the Czech Republic that can be divided into several phases.

Phase 1 – PRE-PREPARATION PERIOD

This is the period that started in 2005 with the kick-off decisions of the Czech government to initiate technical preparations for the euro adoption. It will end with the setting of the official date for the euro adoption. This phase can be characterised as follows:

• The Czech koruna is the only legal tender.
• Completion of the institutional infrastructure for the coordination of technical preparations.
• Carrying out technical preparations of methodical nature that can be performed without knowledge of a binding changeover date.

 Phase 2 – PREPARATION PERIOD

This is the time interval starting with the announcement of the target date which marks the beginning of a three-year period of intensive and closely coordinated preparations for the euro adoption. This phase can be characterised as follows:

• The Czech koruna is the only legal tender and from a certain moment participates in the ERM II.
• Priority is given to the fulfilment of Maastricht convergence criteria.
• All economic entities are increasingly engaged in technical preparations for the euro adoption in accordance with the guidance of the National Euro Changeover Plan.

 Phase 3 – STEPPING UP PERIOD

This period begins with the Council decision to abrogate the derogation from adopting the euro and ends with the Euro Area entry date. The approximate length of this phase will be six months. This phase can be characterised as follows:

• The Czech koruna is still the only legal tender.
• Legal, information and all other systems are made compatible with the irrevocably fixed conversion rate between the Czech koruna and the euro.
• Dual display of prices is underway.
• Minting of Czech euro coins begins.
• Information campaign enters its culmination phase.

Phase 4 – DUAL CIRCULATION

The Euro National Changeover Plan envisages two calendar weeks for dual circulation. During this period euro notes and coins will be introduced into circulation while the koruna currency will be gradually withdrawn. This phase can be characterised as follows:   

• The euro replaces the Czech koruna as legal tender.
• Both the koruna and euro currency may be used for making cash payments, retailers, however, will have a duty to give back only the euro.
• Non-cash payments will be made in the euro only.
• Dual display of prices continues.

Phase 5 – FINAL PERIOD

This period will last until the end of the calendar year when the euro became legal tender. This phase can be characterised as follows:

• The euro is the only legal tender.
• The Czech koruna banknotes and coins can be exchanged for the euro in banks and branches of the Czech National Bank for at least six months.
• Mandatory dual display of prices is terminated no sooner than in six months.