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Understanding Iceland’s Currency and Guide

What is the currency in Iceland is probably the first question that comes into your mind when you start planning your trip to Iceland.

The answer is simple and straight away: the national currency of Iceland is Krona and it comes from the Latin world corona which means “crown”.

What currency do Iceland use?

After Seychelles, Iceland is the second smallest country in the world that has its own currency, a national bank, and its own monetary policy.

The international code of the Icelandic krona is ISK and the name has the same origin as the other country from the Scandinavian Peninsula: the Danish krone, the Swedish Krona, and the Norwegian krone.

On the bills, you will find the figures of the most important politicians, artists, and historical people who played an important role in the country’s history.

It is a misconception that Iceland is part of the European Union and that it uses the euro as its national currency, although the country is considered to be part of the European continent.

But before discussing exchange rates, the best ways to pay in Iceland, and how expensive this country is, let’s find out some interesting facts about the history of Icelandic Krona.

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Krona Banknotes Currency of Iceland Krona Banknotes Currency of Iceland What is the currency in Iceland

Krona Banknotes Currency of Iceland Krona Banknotes Currency of Iceland What is the currency of Iceland

A brief history of Icelandic Krona

Along the years there have been two major periods for the evolution of the Krona:

  • The first krona 1874 to 1981
  • The second krona 1981- today

The first krona that was used in Iceland was the Danish Krone which was introduced in 1874, replacing the rigsdaler, the old Danish currency.

Starting in 1885 the Icelandic territory started to issue their own currency with the same name, Krona.

At the beginning of World War I, the Icelandic krona and the Danish krone separated and the first coins were issued 4 years later, in 1922.

Iceland Currency Money

Iceland Currency Money

In 1922, the Icelandic krona was forced to devalue with 23% against Danish Krone and this was actually the beginning of the Icelandic monetary policy without depending on any other countries.

The year 1925 came with another important event in the history of the Icelandic Krona: the national currency of Iceland was pegged to the British pound until 1939 ( for 14 long years).

After that, between 1939 to 1949, the Icelandic krona was pegged to the US Dollar.

What is the currency in Iceland between 1874 and 1981?

Starting with 1922 on the Icelandic market there were coins and banknotes, issued by the National Authorities from the country.

Starting with 1967, the krona loss its value, the coins began to be very important and so new coins were introduced: 10 krona coins, 50 krona coins, and 5 krona coins.

The banknotes on the market during the first part of krona history were denominations of 5 kronor, 10 kronor, and 50 kronor.

Starting with 1961, the Central Bank of Iceland started again to issue paper money in denominations of 10 kronor, 25 kronor, 100 kronor, and 500 kronor.

The second Krona 1981- today

Due to high inflation in 1981, the old krona was devalued with 100 old krona (ISJ) worth 1 new krona (ISK), and a new banknote was put into circulation, the 500 new krona.

3 years later, a new bill appeared, the 1000 krona and in 1986 the 5,000 kronor was released, too.

For many years on the row, krona coins were not used as their value was too insignificant and you could buy nothing with them.

Things that affected the evolution of the Icelandic krona

This small but outstanding country with a high cost of living has its own currency managed by its central bank with an interesting history and many events that influenced its value over the years.

Today, Iceland’s per capita index is among the highest in the world, even higher than the one from the US or UK.

A very high percentage of the payments are made through electronic means and the most important denomination from the last period happened in 2017 when 10,000 kronor valued around 83 euros.

Money Currency Euro Banknotes Europe

Money Currency Euro Banknotes Europe

The financial crisis from 2008 come in Iceland with a collapse of the local banking sector, an increase in the consumer prices in Iceland, and the krona recorded a very important drop.

Things started to get better in 2009 and the currency maintained its value until 2011 when 114 krona equals one dollar.

Today 1000 krona equals about 6.7 euro and about 7.8 US, and no significant fluctuations have been recorded lately.

What does Iceland money look like?

Like almost all money in the world, Icelandic krona comes in different colors, sizes, and with different images, being easier for the user to identify their value.

If the US dollar bills come with the same greenback and have the same dimensions, things are a little bit different when we discuss Icelandic krona.

If you talk with a local about their money, they will immediately say their money is prettier and easier to recognize.

All the bills have been printed on the faces of politicians, artists, or historical personalities that played an important role in Icelandic culture.

Money Iceland Currency Banknotes

Money Iceland Currency Banknotes

All these bills pay a tribute to these important characters from Icelandic history even though today most people use to pay with credit cards, debit cards, or electronic transfers.

Today you will find in Iceland the following coins and bills:

  • Coins: 1 kronur, 5 kronur, 10 kronur, 50 kronur and 100 Icelandic kronur
  • Banknotes: 500 krona, 1000 krona, 2000 krona, 5000 krona and 10000 krona

Who issued Icelandic krona?

Icelandic krona is issued by the Central Bank of Iceland, an independent institution that is owned by the government.

Krona Banknotes Currency of Iceland

Krona Banknotes Currency of Iceland

They are responsible for the management of the Icelandic monetary reserve, for bills in use, and they also print new money and destroy the damaged and old bills and coins.

What is the exchange rate in Iceland

For a better understanding of how expensive this country actually is and to get a good idea of how much money you need to budget for your Icelandic adventure, I drop below the most commonly used exchange rates:

1000 krona= 6.7 euro
1000 krona= 7.8 USD
1000 krona= 5.8 GBP

How to exchange money in Iceland

Now that you know what is the currency in Iceland, it’s time to discover the best ways to get this money for your Iceland trip.

The good news is that you don’t need to withdraw cash when traveling to Iceland as you can pay with credit cards and debit cards, including American express everywhere.

We were not convinced about this so the first thing we did when landed at Keflavik International Airport was to withdraw some money to have cash.

We stayed in Iceland for about 10 days and we did not use any krona, we paid by card everywhere, including gas stations, restaurants, shops, tourist attractions, and the list could go on.

Exchange Money Iceland Currency Banknotes

Exchange Money Iceland Currency Banknotes

So, my advice is not to withdraw or exchange any dollar USD or euro or GBP in ISK as you will not have where to use local money.

Better instead get a good credit or debit card, with low or no fees for international payments and exchange processes.

And there is something more: get a PIN for your card as most shops and especially gas stations will ask for your PIN to approve the transaction and charge your card.

Still, if you want to see how Icelandic money looks and want to exchange a small amount to have some cash with you then you can withdraw some money from your card or search for an exchange office.

There are exchange offices at the airport but they will charge you extra for the money you will buy, that is why we don’t recommend you to exchange money at the airport.

Better go to Reykjavik city and find a bank or an exchange office and choose the one that gives you the best rate.

Iceland is quite a wild and isolated country so don’t expect to find exchange offices everywhere, especially that everybody pays everywhere by card.

A better option for exchanging money is to withdraw some krona from your card at any ATM you find.

The ATMs from Iceland do not limit the amount you can withdraw and there are no extra commissions.

The only commission you have to pay is the one imposed by the bank where you have opened your account.

That is why we strongly recommend you to check with your bank the commissions before leaving home and get the best travel card for your trip with 0 commission abroad.

What currency to use in Iceland

What is the currency in Iceland? What currency to use in Iceland?

Both these questions have the same answer: krona is the Icelandic currency, so you should use it as long as you are on Icelandic territory.

Currency of Iceland Euro EUR

Currency of Iceland Euro EUR

Some shops, restaurants, and hotels might accept Euro, US dollars, or GBP but the exchange rates used are not good for you.

If you don’t have krona, pay with your credit or debit card but always choose to pay in local currency to avoid the exchange commissions charged by banks.

Money tips for visiting Iceland

1.We talked a lot about money in this article and it is time to give you some tips to have in mind when planning your trip to Iceland:

2. You can use your credit card and debit card almost everywhere in Iceland so you don’t need much cash

3. If you want to have some cash with you, withdraw money from an ATM located in Keflavik airport, do not use the exchange office.

4. There are only two places where you need cash when in Iceland: entrance to more remote hot springs ( Blue Lagoon, Secret Lagoon, and Myvatn Natural Pool accept cards) and public toilets.

5. Save all your tax-free receipts got from tax-free shopping stores in Iceland to ask for VAT when you get back before you leave Iceland

6. Get a card with Cip and 4 digit PIN as you will need it to put gas at gas stations

7. You don’t have to tip anything while in Iceland as this country does not have the tipping culture

8. Get alcohol from the duty-free as it is cheaper and easier to find as along Iceland alcohol industry is heavily regulated

9. Drink tap water, don’t spend your money on bottled water as tap water in Iceland is the best in the world.

10. Plan your trip ahead for best price-quality ratio; Iceland is more expensive if you buy everything on the spot

How much is 1 dollar worth in Iceland?

If 1000 ISK (Icelandic krona) is worth 7.8 USD then this means that with one dollar you can buy 128 kronor.

You cannot buy many things with one dollar as everything is quite expensive in Iceland.

Money Iceland Currency Banknotes

Money Iceland Currency Banknotes

Let me give you some examples:

  • A dinner might cost you around 40 USD, while 3-course meals might go up to 150 or 200 USD
  • A burger cost about 20 USD
  • A pint of beer is around 10 USD
  • Bottled water is around 5 USD
  • A preset meal at a hotel starts from 50 USD

Can I pay with a card in Iceland?

Iceland is one of the friendliest countries in the world when we discuss electronic payment means.

You can use your credit card or debit card almost everywhere in Iceland, including restaurants, shops, touristy attractions, and even public toilets.

Iceland Credit Card Debit Card Money Currency

Iceland Credit Card Debit Card Money Currency

What you should do before leaving home is to go to your bank and get a chip card with a 4 digit PIN as most of the POS from Iceland require these in order to authorize your payment.

ATMs in Iceland

I guess it is clear for everybody what is the currency in Iceland and that you can pay almost everywhere with a card.

Now let me tell you a few words about Iceland’s ATMs so that you know if you insist on withdrawing money once you reach this country.

All major cities have at least one ATM from which you can withdraw money; we strongly recommend you to use ATMs from local banks and not the ones from EURONET as they have higher commissions.

Reykjavik Iceland ATM Currency Money withdrawal ISK EUR

Reykjavik Iceland ATM Currency Money withdrawal ISK EUR

Most of the ATMs are found in Reykjavik but if you venture on the wildest parts of the country don’t expect to find ATMs in remote towns, but most probably you will be able to pay with your card or cash.

Icelandic ATMs do not charge you any additional fee so all the cost you will have when you withdraw money is the one charged by the bank where you have your card.

Can I pay with Euro in Iceland?

Most of the hotels, restaurants, and shops located in touristy areas do accept Euro as a method of payment.

The only thing is that the exchange rate used to convert the ISK to the euro is extremely poor for you.

Iceland Currency Money

Iceland Currency Money

That is why we strongly recommend you to pay with a credit or debit card and if not possible ( which is extremely rare) pay in local currency that you have previously withdrawn from the closest ATM.

Can I use the US dollars in Iceland?

Dollars are accepted as a method of payment but the exchange rates used at restaurants, shops, and hotels are significantly poorer than the official exchange rate published by the Central Bank of Iceland.

The good news is that credit and debit cards are largely accepted so you most probably won’t have to use dollars when traveling to Iceland.

Do I need a PIN to use my card in Iceland?

Most of the terminals that can be found in Iceland require a 4 digit PIN to authorize and charge your card.

Some terminals, but quite a few have the option to charge your card without PIN and will ask you to sign the bill, but this is quite rare.

That is why we recommend you to get a card with a chip and a PIN before traveling to this country, to avoid any unpleasant event.

Should I bring cash when traveling to Iceland?

Iceland is one of the most digitized countries in the world and electronic payment methods are widely accepted.

To have an idea about how things are working around the country, I can tell you that you can pay with a card even in the most remote areas or for use of public toilets.

Iceland Currency Money

Iceland Currency Money

We withdrew some money for our Icelandic adventure and on the last day, we had in our wallet exactly the same amount we got from the ATM 10 days earlier.

There might be some exceptions where you cannot pay with a card, so you might take some cash with you but don’t take a significant amount of cash as you won’t need it.

How much is the tip in Iceland?

Tipping in Iceland is equal to zero as this country does not have a tipping culture which might seem quite strange to you.

The service fee is included in the price and you don’t have to add extra money to the bill anywhere in Iceland.

What currency is used in Iceland?

The answer to the question What is the currency in Iceland is Icelandic Krona (ISK) that was introduced for the first time in 1855.

Krona with plural kronur can be found in banknotes and coins and you have the following exchange rates:

1000 krona= 6.7 euro
1000 krona= 7.8 USD
1000 krona= 5.8 GBP

Is Iceland more expensive than Norway

The simple answer to this question is yes, Iceland is more expensive than Norway but it is also more beautiful and wild.

Many publications rank Iceland as the most expensive country in Europe with an average cost per meal in a restaurant starting from 40 USD.

If a burger and fries and beer in the US is around 13 USD, then for the same food you will end up paying 25 USD in Iceland and about 20 USD in Norway.

What is the best currency to use in Iceland?

The best currency to use in Iceland is the Icelandic Krona, the national currency of this country issued and regulated by the Central Bank of Iceland.

Iceland Currency Money

Iceland Currency Money

When you choose to pay with a card, definitely pay in krona as the exchange rate used by the bank which issued your card is definitely better than the exchange rate used by local sellers.

What is the national currency of Iceland?

The national currency of Iceland is the Icelandic Krona with plural Kronur and was introduced in Iceland in 1855.

Over the years the currency suffered denominations as the inflation rate exploded in Iceland due to international financial crises that occur over the years.

As of today, we have the following exchange rates:

1000 krona= 6.7 euro
1000 krona= 7.8 USD
1000 krona= 5.8 GBP

Logistical tips and tricks for your trip

Book your accommodation
We always use as they have the best price-quality ratio and they offer a wide range of hotels, guesthouses, apartments, and villas to choose from.

You will find here all types of accommodations, from the cheapest ones to the most luxurious.

Don't forget travel insurance
We never leave home without HeyMondo Insurance or Safety Wings Insurance as they offer the best services and a good value for money.

When we go for longer trips around the world we get Globelink Insurance as it offers a good cover for an affordable price.

Travel insurance will always protect you against unexpected costs caused by medical events like illness, injury, theft, or travel cancellation.

We never go on any trip without travel insurance and there were many cases when we had to use it.

Renting a car
We like to explore a country on our own and a car gives us the mobility and freedom to do that.

We always rent our car from Discovercars as they have free cancellation 48 hours prior to starting date and a wide range of car rental companies and options to choose from all over the world.

Tours and attractions
When we are looking for some adventure or we simply want to break up the monotony and discover new places, we always use GetYourGuide.

We love it because we always find the most amazing experiences, with free cancellation and a large variety of activities and tours to choose from.

Airplane tickets and holiday packages
Expedia is our ally when searching for the best price for airplane tickets as it works as an aggregator for a huge number of airlines and we always find the best price for our flights.

Travel tip: use Expedia when you are searching for holiday packages as they have many last-minute offers and great discounts for hotels, flights, and even the whole holiday packages.