In 1946, the coins' designs were altered to remove the royal monogram (CXR), following abolition of the Icelandic monarchy (which had formed a personal union with Denmark) in 1944.

In 1961, the Seðlabanki Íslands became the central bank of Iceland and started issuing paper money, in denominations of 10, 25, 100, and 500 krona.

In September 2002, Davíð Oddsson, the Icelandic Prime Minister at the time, signed two regulations decreeing that all monetary amounts on invoices and financial claims should be stated and paid in whole krona only and that coins with a value of less than one krona should be withdrawn from circulation.

For example, the underprint pattern extends all the way upward and downward, while the other denominations had white margins on every side.

The face of natural scientist and poet Jónas Hallgrímsson appears on the bill, as well as the Eurasian golden plover.

A notable exception is Keflavík International Airport (which has many transfer passengers), where the US dollar, euro and some other currencies are accepted by all merchants.

The largest denomination banknote, the 10000 krona note ( €66.89/US$72.25 in August 2024 ), has a relatively low value; therefore, most of Iceland's high value trades are done in electronic transfers and in other currencies.

[16] With this, the previously high costs for foreign traders and tourists dropped, which Iceland's trade and tourism industry undertook to exploit.

Adopting what is perceived by some as a historically stronger currency might help Iceland to "avoid the turbulence surrounding speculations in international financial markets".

"In terms of growth potentials and welfare, the euro could be expected to bring lower long-term interest rates [...].

"[19] Because of the volatility between the euro and the krona, former Foreign Minister Valgerður Sverrisdóttir considered the idea that Iceland might dollarize itself into the Eurozone without joining the European Union.

An opinion poll about Iceland joining the European Union released on 11 September 2007 showed that 53% of respondents were in favour of adopting the euro, 37% opposed and 10% undecided.

[20] Another poll produced for the Icelandic newspaper Fréttablaðið and released on 30 September 2007 showed 56% opposed to euro adoption and 44% in favour.

In January 2009, one senior Icelandic official stated that due to the crisis "the krona is dead.

"[23] In March 2009, a report by Iceland's Minister for Foreign Affairs, Össur Skarphédinsson, considered three options: retaining the krona, adopting the euro without joining the EU and adopting the euro through EU membership.

[25] In July 2009, the Alþingi (parliament) narrowly voted to apply for EU membership, but that application has been frozen since 2013 (see accession of Iceland to the European Union).

[26] Leaders of the ruling government parties have also stated that the krona will remain as Iceland's currency for at least the foreseeable future.

Some small countries, such as El Salvador, Ecuador and Montenegro, have unilaterally adopted the use of a more stable foreign currency as a means of controlling inflation.

The cost of this is generally very high, as the adopting country loses all control over monetary policy, and all the benefits of seignorage.

[27] Canada was favoured due to its northern geography and similar resource based economy, in addition to its relative economic stability.