<P> The lira (plural lire) was the currency of the Vatican City between 1929 and 2002 . </P> <P> The Papal States, by then reduced to a smaller area close to Rome, used its own lira between 1866 and 1870, after which it ceased to exist . In 1929, the Lateran Treaty established the State of the Vatican City and, according with the terms of the Treaty, a distinct coinage was introduced, denominated in centesimi and lire, on par with the Italian lira . Italian coins and banknotes were legal tender in the Vatican City . The Vatican coins were minted in Rome and were also legal tender in Italy and San Marino . </P> <P> In 2002, the Vatican City switched to the euro at an exchange rate of 1 euro = 1936.27 lira . It has its own set of euro coins . </P> <P> The development of Vatican coins largely mirrored the development of the Italian lire coins . </P>

What is the currency used in vatican city