Iceland currency guide: The Icelandic króna (ISK)

The Icelandic króna (ISK) is the only currency you’ll use in Iceland, whether you’re sending money to someone in Iceland or visiting yourself. This guide breaks down what it’s worth, how to exchange it, and the everyday money habits locals follow, like when to tip and when not to.

What is the currency in Iceland?

Iceland’s official currency is called króna (plural: krónur). If you want to exchange US dollars (USD) for krónur, search for the symbol ISK.

The króna features banknotes in denominations of 500, 1,000, 2,000, 5,000, and 10,000. You’ll find Icelandic coins in 1, 5, 10, 50, and 100 krónur denominations. Prices are listed with the “kr” symbol before or after the number.

A single króna is divided into 100 aurar (singular: eyrir), though coins in aurar denominations—5, 10, and 50 aurar—were officially withdrawn from circulation in 2003.

Króna banknotes are colorful and feature revolutionary leaders, religious scholars, poets, and artists. Notably, the 5,000-króna banknote features a woman named Ragnheiður Jónsdóttir, an accomplished seamstress and educator. She helped shape a legacy of learning and craft that’s still honored today.

Vendors, businesses, and restaurants in Iceland prefer that tourists pay for meals and services using krónur. Although Iceland is a European country, it does not use the euro because Iceland isn’t a member of the European Union.

History of the Icelandic króna

Iceland used Danish currency while under Danish rule, which lasted until the early 20th century. At the end of World War I in 1918, Iceland gained independence from Denmark and established its own currency. Although Nordic countries like Norway, Sweden, and Denmark also use currencies called krone or krona, the Icelandic króna is entirely separate.

Iceland’s history of money is turbulent. Currency controls and significant inflation led to Iceland revaluing its currency in 1981. And then, during the 2008 global financial crisis, the value of money in Iceland dropped significantly. With support from the International Monetary Fund (IMF) and structural reforms, Iceland stabilized its economy and rebuilt trust in the króna.

How much is the Icelandic króna worth?

Exchange rates fluctuate daily based on global market conditions. As of mid-2025, 1 US dollar is equivalent to just over 120 ISK.

To check today´s exchange rate, use the Western Union currency converter.

6 tips for exchanging US dollars to Icelandic krónur

Looking to get the best rates when exchanging USD to ISK? These practical tips can help you identify the best rates, evaluate exchange companies, and avoid over-the-top fees.

1. Research and compare exchange rates

Before exchanging US dollars for krónur, research the exchange rates offered by different companies and institutions. Banks, online platforms, and airport kiosks often charge different exchange rates, and some have hefty fees that can cut into what you get back.

It’s also important to remember that exchange rates fluctuate based on global factors like inflation, interest rates, and market sentiment. Even a small shift can affect how much ISK you get for your US dollars.

To stay informed on the go, you can track live exchange rates with the Western Union^® app.

2. Notify your bank ahead of traveling

Before leaving the country, notify your bank that you’re traveling. Otherwise, your bank’s fraud detection services could freeze your card, making it challenging to take out and use money in Iceland. Most banks let you notify them of international travel online or by phone.

3. Avoid exchanging money at airports, hotels, and tourist areas

Knowing where to exchange currency (and where not to exchange it) can also save you money. For example, it’s a good idea to avoid currency exchange counters in airports, hotels, and tourist areas, which often charge premiums.

For better value, compare rates and fees in advance and get Icelandic currency from a reputable exchange provider like Western Union. Steer clear of informal or unlicensed exchange booths, which may carry a higher risk of fraud.

4. Consider commissions and fees

Even if a company offers a great exchange rate on the króna, it doesn’t necessarily mean it’s the best deal. That’s because some providers advertise low rates but hit you with commissions and fees at checkout.

When exchanging US dollars for Iceland’s currency, take time to compare the total cost (and not just the rate) to get the best possible deal.

5. Opt to be charged in Icelandic currency when withdrawing money from ATMs

When withdrawing money from ATMs in Iceland, it’s generally best to be charged in Icelandic currency rather than US dollars. That’s because withdrawing in króna helps you avoid something called dynamic currency conversion (DCC)—a service that converts your transaction to your home currency at the point of sale using the merchant’s exchange rate and fees.

6. Use reputable exchanges

Before you use a currency exchange service to get Icelandic currency, make sure it’s reputable. Trusted services have strong security features, like transfer tracking, data encryption, Touch ID for apps, and PCI DSS compliance.

Western Union, for example, offers these protections and gives you flexibility to send money online, through our app, or at an agent location in Iceland.

Using money in Iceland

Spending currency in Iceland is straightforward. Credit cards are widely accepted, and ATMs are easy to find if you need krónur. Here are more practical tips for using money in Iceland, including standard cultural practices like tipping etiquette.

Can you use US dollars in Iceland?

No, it’s not customary to use US dollars in Iceland. Instead, plan to use the króna, the official Icelandic currency.

Credit cards are the most common form of payment in Iceland, even for small purchases. Before traveling, check to ensure you bring a card that does not charge foreign transaction fees.

If you want to use cash, you can withdraw ISK at any ATM in Iceland.

Tipping etiquette in Iceland

In Iceland, it’s not customary to tip service workers. Service workers earn fair wages under strong labor laws, and many restaurants automatically include a service charge in the bill. That said, it’s common to round up for taxi fares, and while not expected, many tourists tip guides on tours.

Send money to Iceland with Western Union

Sending money to Iceland is simple with Western Union. You can transfer funds online, through our app, or by visiting one of several Western Union locations across the country. Exchange US dollars for Icelandic krónur with a service you can rely on—wherever you are. Get started today.

Explore more currency guides

Planning to travel beyond Iceland? Explore our other guides to learn how different currencies work around the world:

• European currency guide: The euro (EUR)
• Poland currency guide: The Polish zloty (PLN)
• Turkey currency guide: The Turkish lira (TRY)