Although it has become a member of EU (Europe Union), the currency in Croatia is not officially Euro. The Kuna (code HRK) is official Croatia's currency since 1994.
One Kuna is equal to 100 Lipa. The Croatia banknote is available with value of 1000, 500, 200, 100, 50, 20, 10, and 5 Kuna.
The Croatia coin is available with value of 5 Kuna, 2 Kuna, 1 Kuna, 50 Lipa, 20 Lipa, 10 Lipa, 5 Lipa, 2 Lipa, and 1 Lipa. 5 Kuna banknotes are less used on the markets and 5 Kuna coin is more popular.
The word 'kuna' means 'marten' as a unit of value of martens furs used in meieval trading. Sometimes the name 'kuna' is mistranslated as 'koruna' but it has no relations with some currencies like Czech koruna (code CZK).
When you visit Croatia, you will notice that some coins are not in use anymore. It refers to 1 Lipa coin (the hundredth part of kuna) but in everyday life, coins 5 Lipa and 2 Lipa are seldom used by local people in some regions of Croatia because the sellers there rarely give back the remnant when it's fewer than 10 Lipa.
The answer is Kuna as official currency in Croatia! It is exclusively for practical reasons.
You can pay in some places with Euro notes, but then you will get the change (coins) back in Kuna. In that case you will have the conversion nightmare to work out if you have been charged correctly and have been given the right change.
I suggest to change your local currency in Kuna, before you come to Croatia. Airports, bus stations, train stations and ferry ports have a suitable exchange office but you will be charged a commission of about 3%, for any operation in Croatia.
Using ATM is a wise way to have cash money in local currency in Croatia. They are now nearly everywhere in Croatia except on some the most isolated and uninhabited islands. Just look for the "bankomat" sign.
Visa, MasterCard, Cirrus, Plus, Maestro, and Euro card are the most commonly accepted cash cards. American Express is not commonly accepted . You will find ATM at all major airports and train stations in Croatia and very near to the embarkation point for ferries and buses.
Some useful information about Kuna exchange rate, history about Kuna, Kuna banknotes and many more you can find here: