The currency of Iceland is the Icelandic króna (ISO code ISK), written with the symbol kr. As of 2026, one US dollar buys roughly 138 krónur, though the rate moves daily because the króna floats freely on the open market. Issued by the Central Bank of Iceland (Seðlabanki Íslands), the króna is the official and only legal tender across the country, used for everything from a coffee in Reykjavík to a tank of fuel in the remote Westfjords.
The króna at a glance
The plural of króna is krónur, and the name simply means "crown," a nod to the Scandinavian monetary tradition Iceland shares with Denmark, Norway and Sweden. Here are the essentials:
- Official name: Icelandic króna (plural krónur)
- ISO code: ISK
- Symbol: kr
- Issuing authority: Central Bank of Iceland (Seðlabanki Íslands)
- Historic subunit: the eyrir (plural aurar), worth 1/100 of a króna, now discontinued
Iceland is not a member of the European Union and does not use the euro. Although the country once debated joining the eurozone, it withdrew its EU membership application in 2015 and continues to run its own fully independent monetary policy. With a population of only about 380,000, Iceland is the smallest currency area in the world to operate a freely floating exchange rate.
A short history of the króna
The Icelandic króna was introduced in 1918, the year Iceland became a sovereign state in personal union with the Danish crown. Before that, Iceland had used the Danish krone, and the new currency initially traded at par with it before charting its own course. Over the following decades the króna lost considerable value to inflation, prompting a dramatic redenomination in 1981 when 100 old krónur were replaced by one new króna.
The currency's most testing moment came during the 2008 global financial crisis. Iceland's three largest banks collapsed almost simultaneously, the króna lost roughly half its value against major currencies, and the government was forced to impose strict capital controls to stop money fleeing the country. Recovery was surprisingly swift: the economy rebounded on the back of tourism and fishing, and the last of those capital controls were lifted in 2017, restoring the króna to a normal, freely traded currency.
Banknotes and coins
Icelandic banknotes are circulated in five denominations, each printed in a distinct color and honoring a figure from the nation's cultural and political history:
- 10,000 kr — blue-purple, featuring the poet and naturalist Jónas Hallgrímsson
- 5,000 kr — blue, featuring Ragnheiður Jónsdóttir, a noted embroideress
- 2,000 kr — brown, featuring the painter Jóhannes Kjarval
- 1,000 kr — purple, featuring Bishop Brynjólfur Sveinsson
- 500 kr — red, featuring Jón Sigurðsson, leader of the 19th-century independence movement
Coins circulate in values of 1, 5, 10, 50 and 100 krónur. Rather than portraits, the coins carry images of marine life that reflect Iceland's deep ties to the sea, including a cod, a dolphin, a crab and a lumpfish. Together the notes and coins read almost like a miniature gallery of Icelandic poetry, art, faith and the fishing industry that long sustained the island.
Using money in Iceland today
Iceland is among the most cashless societies on Earth, and travelers quickly discover they barely need physical krónur at all. Credit and debit cards are accepted virtually everywhere, including unmanned petrol pumps, rural guesthouses, food trucks and tiny village shops. Contactless payments and mobile wallets are standard, and many businesses actively prefer cards to cash. ATMs (called hraðbanki) exist in towns but are rarely necessary.
One thing to budget for is the cost of living: Iceland is one of the world's most expensive countries, with high prices for dining, fuel and accommodation driven by its remoteness and reliance on imports. Tipping is not part of Icelandic custom, as service charges are built into prices, so there is no need to add extra at restaurants or for taxis. For a broader picture of the country behind the currency, see our iceland country guide.
Why such a small nation keeps its own currency
It may seem surprising that a country with fewer people than many mid-sized cities maintains its own central bank, mint and monetary policy. Yet the króna is a point of national pride and a tool of economic flexibility. Having an independent currency allows Iceland to set its own interest rates and let the exchange rate absorb shocks, which proved valuable both after the 2008 crash and during swings in tourism and fishing revenue. The trade-off is volatility: a small, open economy means the króna can move sharply, which is part of why prices for visitors can feel like a moving target.
Frequently Asked Questions
Does Iceland use the euro?
No. Iceland uses the Icelandic króna and is not part of the European Union or the eurozone. While some shops and tour operators may quote prices in euros for tourists, transactions are settled in krónur, and euros are not legal tender.
Should I bring cash to Iceland?
Generally no. Iceland is almost entirely cashless, and cards are accepted nearly everywhere, including remote locations. A small amount of krónur can be handy for the occasional vending machine or rural honesty box, but most visitors complete their entire trip on cards alone.
What is the Icelandic currency symbol and code?
The króna uses the symbol "kr" and the international ISO code ISK. Prices are typically written with the amount followed by "kr," for example 1,500 kr.
Why is Iceland so expensive?
As a small, isolated island nation, Iceland imports most goods and has high labor and energy delivery costs. Combined with a strong tourism-driven economy, this makes everyday prices among the highest in the world, even though wages are also high by global standards.