This article assesses the relationship between money, collective identity, and European integration. The recent move of the European Union (EU) toward a common currency – the euro – seems to contradict the conventional ‘one nation/one money’ assumption about the association between states, territory and money creation. However, from a broad macro-historical perspective, the process of European monetary unification is not as exceptional and unique as it is often made out to be. I argue that the relationship between money and collective identity is reciprocal. On the one hand, money is a purposeful political tool in the construction of identities. On the other hand, in order to function properly, money requires some degree of collective identity among its users. Thus, the article examines the role of the euro as part of an explicit project to facilitate the development of a European identity as well as the required level of European identity necessary for a successful functioning of the euro. The key identity aspect at stake in the relationship between money and identity is not an affective relationship between citizens and country, but rather a relationship of trust. During the process of modernisation, trust has become rather abstract and institutionalised. To support a modern relationship of trust, identity does not have to rest on deep affective feelings of belonging. Diffuse identity, based on utilitarian or contractual factors and as part of evolving hybrid identity structures, is sufficient.