What Currency Does Iceland Use?

What Currency Does Iceland Use? (UK Travel & Finance Guide)

If you're planning a trip to Iceland from the UK, one of the most common questions is: what currency does Iceland use? With many European countries now using the euro, it's easy to assume Iceland does too. But in fact, Iceland retains its own unique currency. This guide explains exactly what that currency is, how it works, and what UK travellers should know when paying or exchanging money in Iceland.

What Is the Currency of Iceland?

The official currency of Iceland is the Icelandic króna, often abbreviated as ISK.

• Currency name: Icelandic króna

• ISO code: ISK

• Currency symbol: kr

• Subunit: 1 króna = 100 aurar (although aurar coins are no longer used in practice)

The Icelandic króna is issued and regulated by the Central Bank of Iceland, and it remains the country’s only legal tender.

Who Uses the Icelandic Króna?

The króna is used exclusively in Iceland. Unlike many of its Nordic neighbours or EU states, Iceland is not a member of the European Union and therefore does not use the euro. All shops, hotels, restaurants, and local services in Iceland accept only ISK. While some tourist hotspots may advertise prices in euros or accept foreign cards, all final payments are processed in króna.

How Does the Currency Work in Practice?

In Iceland:

• Prices are displayed in ISK across all sectors

• Cards are widely accepted, even for small purchases

• Cash is rarely used—many Icelanders don't carry any at all

• ATMs dispense króna, and most debit/credit cards work without issue

Exchange rates for the Icelandic króna can fluctuate significantly due to the country’s relatively small economy and reliance on tourism and natural resources. However, financial infrastructure is modern and efficient.

Benefits and Risks for UK Travellers

Benefits:

• Easy access to cash via ATMs

• Strong digital payment systems mean you may not need cash at all

• Most UK travel cards (e.g. Monzo, Starling, Chase) work seamlessly in Iceland

Risks:

• Iceland is known for being expensive, and the króna’s value can shift quickly

• Using GBP or euros is not accepted for direct payment

• Paying in GBP at the checkout (if offered) can result in dynamic currency conversion fees, so always choose to pay in ISK

Currency Exchange Options

If you want to get króna before you go:

• Most UK high street exchange services do not stock ISK, as it's a niche currency

• You can withdraw cash from ATMs on arrival in Iceland

• Use a fee-free travel debit card to get better exchange rates (e.g. Wise, Revolut, Starling)

Avoid exchanging money at the airport or hotels unless necessary—they often offer poor rates.

Real-Life Example

If you're staying in Reykjavík and buy a coffee for 650 ISK, your UK bank may charge:

• £3.70 using your card with a competitive exchange rate

• £4.00–£4.20 if you allow the shop or ATM to convert to GBP for you using DCC (dynamic currency conversion)

Always choose local currency to avoid inflated rates.

FAQs

Does Iceland use the euro?
No. Iceland is not in the Eurozone and does not accept euros as legal tender.

Can I use pounds or euros in Iceland?
Generally no. While some souvenir shops may list prices in euros, all final payments are processed in króna.

Is it better to take cash or use a card?
Use a travel debit or credit card with low or no foreign transaction fees. Iceland is one of the most card-friendly countries in the world.