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Iceland currency is the Icelandic króna (ISK). Although coins and banknotes are still in circulation, Iceland is largely a cashless society, and cards are accepted almost everywhere. Most travelers won’t need much cash, but understanding how Icelandic money works helps you manage exchange rates, payments, and your travel budget with confidence.
The Icelandic currency is króna (Íslenska krónan), written with the symbol “kr.” and abbreviated internationally as ISK. It’s the only legal tender in Iceland and is issued by Seðlabanki Íslands, the country’s Central Bank.
The name “króna” means “crown.” It shares its origin with other Scandinavian currencies, including the Swedish krona and Danish krone, reflecting Iceland’s Nordic roots.
While currency in Iceland includes both coins and banknotes, most everyday payments are made with debit or credit cards. Still, physical money remains in circulation and may occasionally be used in certain situations.
Understanding the Icelandic króna makes it easier to interpret prices, avoid unnecessary conversion fees, and manage money in Iceland confidently. If you're planning your budget, you can read more about everyday expenses in our guide to prices in Iceland.
Reykjavík city center, where card payments are accepted almost everywhere.
In Iceland, you rarely need cash. Debit and credit cards are accepted almost everywhere and are the preferred way to pay for everyday purchases, from restaurants and tours to hotels, public transport, gas stations, and even many public restrooms.
You can pay by card for:
Contactless payment methods such as Apple Pay and Google Pay are also widely accepted, making it easy to pay quickly and conveniently throughout Iceland. Most travelers will not need much Icelandic money, but carrying a small amount can still be useful in a few situations.
Cash can still be useful for:
Tip: When paying by card in Iceland, always choose to pay in the local currency if you’re given the option. Selecting ISK instead of your home currency helps you avoid dynamic conversion fees and usually results in a better exchange rate from your bank.
Icelanders first began issuing their own banknotes in 1885. Before that, the Danish krone was used, as Iceland was under Danish Royal rule. Introducing Icelandic banknotes marked an important step toward financial independence. In 1918, Iceland gained autonomy from Denmark and officially adopted the Icelandic króna as the country’s national currency.
The first banknotes issued were 5, 10, and 50 króna denominations, which have since been replaced by coins. In the early years, several state institutions and banks managed the issuance of Icelandic money as the financial system developed.
In 1904, the first 100 króna note was introduced, followed later by the 1 króna note. By 1935, the 500 króna note was added (still in circulation today), and higher-value notes such as 1000 króna followed in the decades after.
1,000 and 5,000 ISK Icelandic króna banknotes.
The first Icelandic coins appeared in 1922, beginning with 10 and 25 aurar (cents). Additional denominations followed in the following years, including the 1 króna coin, which remains in circulation today. After Iceland gained full independence in 1944, coins were redesigned in 1946 to remove the Danish Royal Monogram.
In 1967, new coin denominations were introduced following a significant drop in the value of the króna. The most important turning point came in 1981, when Iceland experienced hyperinflation. The Icelandic króna was revalued by a factor of 100, new banknotes and coins were issued, and the currency code was changed from ISJ to ISK.
The redesigned 500 ISK note was introduced during this reform, followed by 1000 ISK and 5000 ISK notes. The newest banknote, 10,000 ISK, was introduced in 2013. Today, Seðlabanki Íslands (Iceland’s Central Bank) manages and issues Icelandic currency, while banknotes are printed by De La Rue in England.
Icelandic banknotes feature important historical and cultural figures who helped shape the country’s independence, literature, religion, and art. Each denomination of the currency of Iceland highlights a person who played a significant role in Iceland’s national identity.
Jón Sigurðsson (1811–1879) was the leader of Iceland’s independence movement. He advocated for greater autonomy from Denmark and is often regarded as the father of modern Iceland.
The 500 ISK Icelandic króna banknote featuring independence leader Jón Sigurðsson.
Brynjólfur Sveinsson (1605–1675) was a Lutheran bishop at Skálholt, one of Iceland’s most important historic religious centers. He is best known for preserving medieval Icelandic manuscripts, including texts related to Norse mythology and the sagas.
The 1,000 ISK banknote highlights Bishop Brynjólfur Sveinsson and Iceland’s literary heritage.
Jóhannes S. Kjarval (1885–1972) was one of Iceland’s most celebrated painters. His artwork often depicted Icelandic landscapes, folklore, and nature.
The 2,000 ISK Icelandic króna note honors painter Jóhannes Kjarval.
Ragnheiður Jónsdóttir (1646–1715) was a skilled seamstress and educator known for her craftsmanship and dedication to teaching. She is the only woman currently featured on Icelandic banknotes.
The 5,000 ISK banknote features Ragnheiður Jónsdóttir, the only woman on Icelandic currency.
Jónas Hallgrímsson (1807–1845) was a poet, writer, and natural scientist who played a key role in Iceland’s 19th-century cultural awakening. His poetry and scientific work contributed to strengthening Icelandic language and national identity.
The 10,000 ISK note depicts poet Jónas Hallgrímsson, a key figure in Icelandic culture.
Exchange rates fluctuate daily based on global financial markets. The Icelandic currency converter helps you check the latest exchange rate between the Icelandic money (ISK) and other currencies, including USD and EUR.
Travelers shopping for souvenirs in Iceland can take advantage of tax-free shopping, with eligible purchases over 6,000 ISK qualifying for a VAT refund before departure.
If you are traveling in Iceland, you can claim a VAT (Value Added Tax) refund on individual purchases over 6,000 ISK (including VAT) from participating stores. This applies to physical goods such as clothing and souvenirs, but not to food, drinks, or services.
When shopping, ask for a tax-free form at the time of purchase. Before departure, present your receipt and goods at the tax refund desk at the airport to process your refund. VAT in Iceland is currently about 24% and 11% on special goods.
Tip: Understanding what currency is used in Iceland, exchange rates, and Iceland prices helps you plan a smoother trip.
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Explore our most popular activities and build your Iceland adventure with confidence.
The exchange rate between the US dollar and Icelandic currency changes daily. On average:
Always check the latest Iceland currency to USD or USD to Iceland currency rate before exchanging money, as exchange rates fluctuate regularly.
The best currency to use in Iceland is the Icelandic króna (ISK). ISK is the official currency in Iceland and the only legal tender accepted for payments.
While Iceland is largely cashless and cards are widely used, all prices are listed in ISK currency.
No, foreign currencies such as US dollars or euros are not accepted for payments in Iceland. However, international debit and credit cards work seamlessly, making paying in Iceland simple and convenient without exchanging cash.
Iceland maintains its own independent currency instead of adopting the euro. The Icelandic money allows the country to control its monetary policy and respond to local economic conditions. This independence directly affects the fluctuations of the exchange rate in Iceland and influences Iceland prices and overall travel costs.
Yes, Iceland is generally considered an expensive destination due to high wages, import costs, and its remote location. Food, accommodation, transportation, and tours typically cost more than in many other countries. However, understanding Iceland prices and planning your budget carefully can help you manage money in Iceland more effectively.
Iceland is an expensive country, but there are budget-friendly ways to visit. Discover how to embrace its magic while keeping your wallet happy.
There are endless reasons to go to Iceland. There’s no question why everyone is travelling to Iceland these days — the country has long been known for its stunning landscapes. Beyond the scenery, however, there are many other things that are interesting about Iceland and Icelanders.
Iceland is renowned for its diverse landscape and a wide variety of amazing things to see and do. There is so much to see, so much to do, and often in a limited amount of time. Planning holidays in Iceland might seem daunting at first, but we put together this guide to help you out.
