Planning a trip to the land of fire and ice? Iceland’s breathtaking landscapes, from the Northern Lights dancing across the sky to majestic glaciers carving through volcanic terrain, are undoubtedly a major draw. But before you get swept away dreaming of geysers and geothermal spas, there’s a practical question to consider: currency. Specifically, Does Iceland Use Euros?
Let’s clear up any confusion right away. While Iceland is a European nation and part of the Schengen Area, the answer to the question “does Iceland use euros?” is no. Iceland has maintained its own independent currency, the Icelandic króna (ISK), for decades. It’s crucial to understand this before you travel to ensure smooth transactions and avoid any financial hiccups during your adventure.
Understanding the Icelandic Króna
The official currency of Iceland is the Icelandic króna, often abbreviated as ISK or kr. “Króna” translates to “crown” in English, a common name for currencies in Nordic countries. Interestingly, despite geographical proximity and cultural ties, Iceland is not part of the European Union and has opted out of adopting the euro. Among the Nordic nations, only Finland uses the euro, while Norway, Sweden, and Denmark, like Iceland, retain their own “krone” or “króna.” Each of these currencies is distinct and unique to its respective country.
Icelandic Currency Denominations: Banknotes and Coins
When you handle Icelandic currency, you’ll encounter both banknotes and coins in various denominations:
Banknotes:
- 500 ISK Note: Easily recognizable by its red color and featuring Jón Sigurdsson, a pivotal figure in Iceland’s independence movement.
- 1000 ISK Note: Distinguished by its purple hue and the portrait of Brynjólfur Sveinsson, a 17th-century Bishop of Skálholt.
- 2000 ISK Note: Showcases the artistic spirit of Iceland with the image of renowned artist Jóhannes S. Kjarval on a yellow-orange background.
- 5000 ISK Note: A tribute to women in Icelandic history, this orange note features Ragnheiður Jónsdóttir, a skilled embroiderer and the first woman to grace Icelandic currency.
- 10000 ISK Note: The highest denomination, this blue banknote honors Jónas Hallgrímsson, a celebrated poet, scholar, and naturalist, recognizing his significant contribution to Icelandic culture.
Coins:
- 1 króna
- 5 krónur
- 10 krónur
- 50 krónur
- 100 krónur
A Brief History of Icelandic Currency
To appreciate why Iceland uses the króna and not the euro, a quick look at its monetary history is helpful. In the 1870s, Sweden, Denmark, and Norway formed the Scandinavian Monetary Union to stabilize their currencies. At that time, Iceland was under Danish rule and adopted the Danish krone. However, this union dissolved after World War I. Subsequently, Iceland established its own independent currency, the Icelandic króna, replacing the Danish krone as the official legal tender. This historical context underscores Iceland’s long-standing monetary independence.
Navigating Currency Conversion and Payments in Iceland
Understanding exchange rates and payment methods is key to managing your budget in Iceland.
Currency Conversion Tips
When planning your budget, you’ll need to convert prices from Icelandic króna to your home currency. You’ll often see the Icelandic króna denoted as KR or ISK. As of late 2024, approximate exchange rates were around 138 ISK to 1 US dollar, 150 ISK to 1 euro, and 176 ISK to 1 British pound. These rates fluctuate, so it’s always best to check current exchange rates closer to your travel dates.
Calculating conversions in your head with these numbers can be tricky. A helpful tip is to remember the approximate value of 1,000, 5,000, or 10,000 ISK in your currency. Many online currency converters and mobile apps can assist with real-time conversions.
Another point of potential confusion for some visitors is the use of punctuation in prices. In Iceland (and many European countries), a full stop (.) is often used as a thousands separator, while a comma (,) is used as a decimal separator. Therefore, “11.999 ISK” represents approximately 12,000 ISK, not twelve króna.
Cash vs. Card Payments in Iceland
While cash was once king in many countries, Iceland has embraced card payments to a remarkable extent. Credit and debit cards are widely accepted in Iceland, even for very small purchases. Contactless payment technology is prevalent, allowing you to simply tap your card for transactions, much like you would in many Western countries.
Do You Need Cash in Iceland?
Given the widespread card acceptance, you might wonder if you need any cash at all in Iceland. For the vast majority of travelers, relying primarily on cards is perfectly feasible. You can use cards for almost everything, from restaurants and hotels to gas stations and even public restrooms.
However, carrying a small amount of Icelandic króna as a backup is still a wise precaution. While card payments are the norm, unforeseen situations can arise where cash might be useful. For instance, you might encounter smaller establishments in very rural areas or experience temporary technical issues with card payment systems. Having some cash on hand offers peace of mind, especially when venturing off the beaten path.
Obtaining Icelandic Króna
If you decide to have some cash for your trip, you have a few options for obtaining Icelandic króna:
- Order from Your Bank at Home: Some banks allow you to order foreign currency before your trip. However, exchange rates and fees might not be the most favorable.
- ATMs (Hraðbanki) in Iceland: A convenient option is to withdraw ISK from ATMs upon arrival in Iceland, such as at Keflavik Airport (KEF). ATMs are readily available in cities and towns throughout the country. Look for ATMs marked “Hraðbanki” (Icelandic for ATM).
- Currency Exchange Services: Currency exchange services are also available, including at Keflavik Airport. Be sure to compare exchange rates and fees to ensure you get a competitive deal.
When withdrawing money from ATMs in Iceland, be mindful of potential fees charged by your bank and the ATM operator. It’s advisable to inquire about these fees beforehand to minimize costs.
Can You Use US Dollars or Euros in Iceland?
While Iceland’s official currency is the króna, some tourists wonder if US dollars or euros are accepted. In limited instances, particularly in tourist-heavy areas, some establishments might accept euros or US dollars. However, this is not the norm and should not be relied upon.
Businesses that choose to accept foreign currencies do so as a convenience for tourists, not as an official policy. Even if a place accepts USD or EUR, the exchange rate offered is unlikely to be favorable compared to using ISK. Furthermore, change will most likely be given in Icelandic króna.
The best and most cost-effective approach is always to pay in Icelandic króna.
Enjoy Your Icelandic Adventure, Currency Prepared!
In conclusion, to reiterate the answer to “does Iceland use euros?”: No, Iceland uses the Icelandic króna (ISK). While credit and debit cards are widely accepted, understanding the local currency and having a small amount of cash as a backup will contribute to a smoother and more enjoyable trip. By being currency-smart, you can focus on what truly matters – immersing yourself in the unparalleled beauty and unique experiences that Iceland has to offer.
For further reading on managing your money in Iceland, you might find our blog post on “Where to exchange money in Iceland” helpful. Happy travels!
