Currency in Iceland – which currency does Iceland use?

One thing we always need to get right when travelling is money. No one wants to risk running short of funds, particularly if that means having to forgo some of the experiences and activities we’ve been looking forward to. So a commonly asked question from first-time visitors is which currency will they be using in Iceland. Let’s find out what you need to bring.

The official currency

Iceland uses the Icelandic króna (plural krónur), and not the euro. Though it is part of the Schengen Zone, the country isn’t a member of the European Union and neither is it part of the euro zone. (In fact, Finland is the only one of the Nordic countries to use the euro.)Norway, Denmark, Sweden and of course Iceland all use the krone or króna – each one unique to their own nation. The name means “crowns”.

Icelandic banknotes and coins

Iceland issues banknotes to the value of 500, 1000, 2000, 5000 and 10000 ISK. Also in circulation are 1,5,10, 50 and 100kr coins.

The 500kr note is red and features the image of Jón Sigurdsson, leader of Iceland's independence movement. Brynjólfur Sveinsson, Bishop of Skálholt in the 17th century, appears on the purple 1000 ISK note, while artist Jóhannes S. Kjarval takes his place on the 2000 ISK note.

An accomplished embroiderer, wealthy Ragnheiður Jónsdóttir was the first woman to be chosen to appear on Icelandic currency when her picture was chosen to adorn the 5000 ISK note in 1986. Finally, the importance of Jónas Hallgrímsson's work as a poet, scholar and naturalist to Icelandic culture was celebrated with his image on the blue 10000 ISK banknote.

A bit of history

From the 1870s, Sweden, Denmark and Norway were members of the Scandinavian Monetary Union, an agreement that was introduced with the aim of strengthening their separate currencies. At that time Iceland was under Danish rule. After the First World War, the union was disbanded and the Icelandic króna replaced the Danish krone as the country’s official currency.

Working out conversions

 
You’ll see Icelandic króna referred to as kr or ISK. As of May 2024, there were 138 króna to one US dollar, 150 to a euro and 176 to a British pound. Such numbers don’t make it easy when calculating what something costs in your own money, though you can help yourself by keeping a note of what 1000, 5000 or 10,000 ISK is worth. Another thing that can be confusing at first is that you’ll often see a full stop used where you might expect a comma. So for instance, 11.999 ISK is almost 12,000, not 12.

Paying in cash

In some countries, cash is king and it is common to pay for a lot of purchases with coins and notes. One thing you’ll notice in Iceland is that credit and debit cards are widely accepted, even for relatively small amounts. Contactless payment terminals are widespread, so you can simply tap your card just as you would at home.

Do you need cash at all?

Even if you plan to use credit and debit cards, carrying a small amount of cash can be beneficial. Depending on what you are doing and where you are going, you might not need cash at all. However, no one wants to find themselves without a means of payment miles from a bank or ATM, so most travellers will want to carry at least a small amount of cash as a backup.

Where to get Icelandic currency

It’s possible to order this from your bank at home, but you may prefer to draw some from an ATM (Hraðbanki in Icelandic) on arrival. You can do this at Keflavik Airport for example, where a new currency exchange operated by Change Group will also soon be open. Note that the fees associated in taking money from ATMs vary, so check what it’s going to cost you before making your withdrawal.

Should you bring US dollars or euros with you?

 
If you’re a frequent traveller you’ll know that it’s sometimes the case that you will find establishments that will accept dollars or euros, even in countries that have their own official currency. If one of these happens to be your own currency, you may wish to bring some with you. However, as with anywhere in the world, you’ll almost certainly get the best deal by paying in local currency.

Though it’s by no means common in Iceland, some places will allow you to pay in euros or US dollars. However, it’s best not to rely on this being the case. It’s not an official policy; these shops and businesses choose to accept alternative currencies to make life more convenient for tourists. Note that you’ll most likely – but not always – receive any change in ISK.

However you choose to make your payment, have fun spending your money in Iceland!

Remember to check out our blog post on 'Where to exchange money in Iceland'.