The Currency in Lanzarote is the Euro, which is made up of notes from €5 to €500 and coins from 1 cent up to €2.
Here are some general currency exchange tips:
- The rate changes on a daily basis, you can check the current mid bank rate by googling it, for example; “Pound versus Euro.”
- Airport currency exchanges tend to offer the worst rates
- There are lots of small shops here which offer exchange. Watch the rate, though, as they often promote one rate, and then tell you that’s for travellers cheques, and offer a lower one for cash
- When paying by card, select “local currency,” you will generally get a better rate
- Cash machines will usually charge you a fee to draw money out
General Holiday Spending
For general holiday spending, we’d advise using a multi currency car like Wise or Revolut. Personally, we’ve used Wise for a number of years, and have Sterling, Euro and US Dollar accounts. It’s so easy to move money from one currency to another at the mid bank rate and you simply pay with your debit card. Wise.
Large Purchases / On going exchanges
There are two situations where we’d recommend using a currency transfer specialist. The first is for a large purchase, like a house. A transfer company will find you the best rate, and they can also buy your currency at a set price – for example, if you want to set the price at €1.25 to the pound, they will buy it for you at the exact moment it hits that mark.
The second is for regular payments, for example, of you own a property here and have to make a regular transfer to cover the mortgage or bills, using a currency transfer specialist will do that efficiently and at the best rates.
If you’d like a recommendation for a currency transfer company, we’re in touch with one that is based on the island and is fully regulated under EU law. Just get in contact and we’ll put you in touch.
Additional Information for UK Citizens Post Brexit
Brexit, currency transfers and the law
As we adjust to life post-Brexit there are many things to consider, but if you need to move money abroad there is one particular change that it’s essential to be aware of.
The free movement of services came to an end at the close of the transition period, with service providers instead having to comply with the different rules of the EU member states in order to operate legally.
Of particular note to people making international money transfers is the fact that UK financial service firms lost their financial services passports on 1 st January 2021.
What is a financial services passport?
Before Brexit the ‘passporting’ of financial services meant that firms were able to operate in the European Union (EU) and European Economic Area (EEA) under a UK-based licence. For example, a company authorised by the Financial Conduct Authority (FCA) in the UK could use this licence to work with customers based in any other country in the EEA.
However, as the UK has now lost these passporting rights, any financial services firm (including currency transfer providers) must have a valid EU licence if they want to continue working with customers in the EU/EEA.
The Royal Decree
On 29th December 2020 the Spanish Royal Decree-Law 38/2020 was published. This Decree outlines measures for the adaption to the status of a third State of the United Kingdom of Great Britain and Northern Ireland after the end of the transition period.
The Royal Decree came into force on 1 st January 2021 and includes a specific section about financial services and how firms from that sector can work with customers based in Spain moving forwards.
According to the Royal Decree:
‘From 1st January 2021, UK authorised entities will be subject to the relevant Spanish legislation and applicable regimes in respect of third country firms. UK entities will have to obtain a new authorisation to operate in Spain.’
The Bank of Spain (Banco de España) is the FX supervisory authority in Spain and can impose penalties on any currency providers who fail to comply with the decree in order to safeguard the interests of customers.
You may have heard some discussions in the media about ‘equivalence’ – whereby the European Commission can open up market access for some UK-based service providers.
The European Commission can grant a country equivalence if it views the country’s laws as being similar in intent and purpose to the laws of the EU, but it can also withdraw equivalence on 30 days’ notice if the situation changes.
While this is good news for some sectors, financial services are subject to different equivalence regimes and the level of access offered is far narrower than passporting permitted.
It should also be noted that equivalence operates in fewer areas, covers fewer services and is less secure than passporting. International currency transfers are one of the financial services not covered by equivalence, so the provider you use must still have a valid EU licence if you’re going to continue working with them.
What do you need to know?
Any currency transfer provider offering their services to customers based in Spain must be regulated by a relevant EU authority.
If they aren’t licenced appropriately and in accordance with the Royal Decree they cannot renew contracts with existing customers or solicit new customers. They must also have concluded working with existing customers based in Spain by 30th June 2021.
If you’re using a currency transfer specialist to move money to or from Spain and they haven’t sent you any communications regarding a change of licencing post- Brexit, get in touch with them to find out whether or not they have a valid EU licence.
This is a simple question and something they should be able to answer instantly. As mentioned previously, this licence must be with a relevant EU-based regulator, like the Bank of Spain (Banco de España), and your provider should be able to tell you their licence number.
If your provider is only authorised by the FCA they will be unable to continue servicing your requirements from June (and should inform you of that fact) so you will need to find a new currency transfer company in order to ensure the security and continuity of your payments.
When switching providers find a currency company that is licenced to operate in Spain. You may also want to check things like their online reviews, whether or not they’ve won any industry awards and when they were established.
You may find that by moving providers you actually end up working with a company whose customer service and range of products is better suited to your needs, so start looking into your options now.
Residents of Spain choosing a currency exchange company post-Brexit If you don’t currently have an FX company to work with and you’re a Spanish resident please ensure you only enter into an FX agreement with an EU regulated FX company. As a Spanish resident you won’t be covered by the FCA or Bank of
Spain post-Brexit if you enter into a new contract with a non-EU regulated company.
More reading? Here are some ways to save money in Lanzarote.