On 2 October 2026 one pound bought 1.176 euros. Several pages explaining money in Gibraltar print that relationship upside down, which is how visitors arrive believing their euros go further here than they do. The short answer to the question in the title is that Gibraltar uses pounds, its own pounds, and that euros are taken in most shops at a rate the shop picks. The longer answer is that the cash is not where most people lose money. The card terminal is. Gibraltar has its own currency, the [Gibraltar pound](https://en.wikipedia.org/wiki/Gibraltar_pound), ISO code GIP. It is pegged to sterling at par and exchangeable with it one for one. Notes and coins are issued by the Government of Gibraltar, not the Bank of England. Notes come in 5, 10, 20 and 50 pounds, with a 100 pound note that exists and is rarely seen. Coins run 1p, 2p, 5p, 10p, 20p, 50p, 1 pound, 2 pounds and 5 pounds, so a handful of Gibraltar change feels exactly like a handful of British change. The Currency Notes Act 2011 is what makes those notes and coins legal tender within Gibraltar, replacing the 1934 Act that first gave the government the right to print them. Bank of England notes and British coins also circulate here and are universally accepted. You can spend a Bank of England twenty in a Main Street shop without anybody blinking, and you will frequently get Gibraltar notes back in change. The peg is not a gentlemen's agreement. When the 1934 Act gave the government the right to print notes, it came with the obligation to back each one with sterling reserves at a pound for a pound, and to exchange it on that basis. That is why a Gibraltar twenty is worth exactly twenty pounds here and why nobody in Gibraltar treats the two currencies as different things. Here is the asymmetry that catches people. Gibraltar notes are denominated in pounds sterling, and they are not legal tender anywhere in the United Kingdom. The exchange runs one way at full value and the other way with friction. Most visitors spend most of their money on a card, so this is the section that actually matters, and it is the one Gibraltar currency guides skip. When a terminal here asks whether you want to be charged in pounds or in your home currency, that is [dynamic currency conversion](https://en.wikipedia.org/wiki/Dynamic_currency_conversion). Choosing your home currency hands the conversion to a third party operator at the till rather than to Visa or Mastercard. That operator sets the rate, starting from a wholesale interbank rate and adding a markup. The markups are not small. Documented cases run to 18 per cent, and one worked example sits at the interbank rate plus 2.95 per cent. The European Union took the problem seriously enough to pass Regulation 2019/518, which requires the total conversion charge to be disclosed as a percentage markup. In 2015 the Australian competition regulator fined Visa roughly 18 million Australian dollars plus 2 million in costs over related conduct. The rule is one line and it is worth more than everything else in this post. At a terminal in Gibraltar, choose pounds. Every time. Your card issuer then converts at its own rate, and a card with no foreign transaction fee gets to actually do its job, which it cannot do if the conversion already happened before the transaction reached it. That applies at cash machines too. An ATM offering to dispense with conversion at a guaranteed rate is doing the same thing, and the markup at tourist area machines is routinely worse than at a shop counter. Euros are accepted in most retail and tourist businesses. They are not accepted by government offices or the Royal Gibraltar Post Office, so the euro is a convenience of the private sector rather than a second official currency. The rate is set by each shop. It is not published, not regulated and not consistent between two shops on the same street. So here is the arithmetic rather than a promise. The [European Central Bank reference rate](https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/eurofxref-graph-gbp.en.html) on 2 October 2026 put one pound at 1.176 euros, which means one euro was worth about 85 pence. On that basis a 20 pound purchase is 23.52 euros at a fair rate. Now suppose a shop values your euro at 80 pence instead of 85. The same 20 pound purchase costs you 25 euros. That is about 6 per cent more, on every transaction, all week. Shift the shop rate to 75 pence and the same basket costs 26.67 euros, roughly 13 per cent over. We are not going to tell you what any particular shop charges, because we could not find a reliable survey of actual euro rates offered in Gibraltar and we are not going to invent one. Ask at the till before you hand the notes over. A business that is giving you a fair rate will tell you what it is. One more thing about euros. Your change comes back in Gibraltar pounds, almost always. So paying in euros does not keep you in euros, it converts you into the one currency that