What is the Currency in Iceland?

What is the Currency in Iceland?

If you’re visiting Iceland for its waterfalls, geysers or northern lights, it’s worth understanding the local currency before you go. This guide is for UK travellers planning a trip to Iceland and explains the currency in use, how to pay for goods and services, and how best to manage your money while abroad.

What currency does Iceland use?

Iceland’s official currency is the Icelandic Króna, abbreviated as ISK and often shown with the symbol kr. It is the only legal tender in Iceland, and all transactions—including accommodation, food, excursions and shopping—are carried out in króna.

Despite being part of Europe, Iceland is not a member of the European Union or the Eurozone, so it does not use the euro.

How is the Icelandic króna structured?

The króna is a decimal-based currency, divided into 100 aurar, although aurar coins are no longer in circulation. In practice, all transactions are made using whole króna amounts.

Banknotes are issued in denominations of 500, 1,000, 2,000, 5,000 and 10,000 ISK. Coins come in 1, 5, 10, 50 and 100 ISK, although coins are not used frequently, especially for small purchases.

As of the latest exchange rate, £1 is worth roughly 170–180 ISK, but this fluctuates regularly—so it’s wise to check up-to-date rates before you travel or convert money.

Can you use foreign currency in Iceland?

No. Iceland is a króna-only country. Businesses are not permitted to accept euros, US dollars or other foreign currencies as payment. Even in tourist-heavy areas like Reykjavík or the Blue Lagoon, you’ll need to pay in ISK.

That said, most visitors don’t need to carry large amounts of Icelandic cash—because Iceland is one of the most card-friendly countries in the world.

Is Iceland cash-based or card-friendly?

Cards are accepted virtually everywhere in Iceland—from taxis and public toilets to street vendors and remote petrol stations. Contactless payments, Apple Pay and Google Pay are widely supported.

In fact, many locals and tourists use their card exclusively, and cash is becoming increasingly rare. Still, it’s sensible to carry a small amount of cash just in case, especially if you’re heading to more rural areas where card machines might be temporarily offline.

UK travellers should ideally use a fee-free travel card such as Monzo, Starling or Revolut to avoid high transaction or currency conversion charges.

Should you exchange money before you go?

You may be able to get ISK from select currency providers in the UK, but availability is limited and rates can be poor. It’s more practical to withdraw cash from ATMs on arrival in Iceland if needed, though many visitors find they don’t need cash at all.

ATMs are located at the airport, in Reykjavík and in larger towns. They accept major international cards, including Visa and Mastercard.

Tips for managing money in Iceland

• Use a card wherever possible—it’s the norm and often more secure

• Always choose to pay in ISK, not GBP, when offered by card machines

• Avoid withdrawing large amounts of cash unless necessary

• Budget accordingly—Iceland is expensive, with everyday items often costing double compared to UK prices

• Tipping is not expected in Iceland, as service charges are usually included in the price

Common misconceptions

Some UK visitors assume that Iceland uses the euro because of its European location, but this is incorrect. The króna is the sole currency accepted.

Another common mistake is assuming you’ll need to bring a lot of cash. In reality, Iceland is practically cashless, and card payments are not only accepted, they’re encouraged.

In summary

Iceland’s currency is the Icelandic króna (ISK), and it’s the only currency accepted throughout the country. While cash is still available, Iceland is one of the most card-friendly destinations in the world. UK travellers can enjoy a seamless payment experience by using fee-free travel cards and paying in local currency at all times.