Like most central banks, the Central Bank of Iceland has the exclusive right to issue notes and coin in Iceland. The name of the currency is króna (pl. krónur). When the Central Bank was established in 1961 it was granted the sole right to issue notes, while the right to issue coins was transferred to the Bank from the National Treasury in 1967. However, the history of note and coin issuing in Iceland dates back to much earlier.

A total of five denominations of notes and five denominations of coins are valid as legal tender in Iceland.

The following legal tender is valid in Iceland: Notes to the value of 10000, 5000, 2000, 1000 and 500 kr., and coin to the value of 100, 50, 10, 5 and 1 kr.

The notes were designed by Kristín Þorkelsdóttir, with Stephen A. Fairbairn. The coins were designed by Þröstur Magnússon. The notes carry the facsimile signature of Governors of the Central Bank. All notes are watermarked with a portrait of Jón Sigurðsson (1811-1879, former statesman).

Notes and coin are a claim on value and serve as a vehicle for trading. Money therefore remains a vital element of the modern economy, even though other payment forms have evolved. Money is said to perform a triple function. It serves as a medium of payment, i.e. enables trading to take place. It is also a medium of storage, i.e. valuables can be kept in monetary form. Finally, money is a unit of measurement, i.e. it measures the value of things.