The governor of the Central Bank of Iceland says it is time to investigate whether krona denominated coins and notes are too small following decades of inflation.
It costs three kronur to produce a new one krona coin, which leads Mar Gudmundsson to ponder if they are still necessary. He also says it is possible a new 10,000 kronur note will come into circulation, replacing the 5,000 as the biggest denomination.
There are over 96 million one krona coins in circulation today and it falls to the Central Bank of Iceland to mint coins to keep up with demand.
The present-day one krona coin was put into circulation in 1981, but the currency has been the victim of inflation since then. Today it takes 37 kronur to buy what one krona bought back then. It is perhaps not surprising that it now costs a lot more to mint the coins than they are actually worth.
At present the 5,000 kr. note is the biggest unit of currency in Iceland. At only EUR 30, many people consider that impractical — especially in a relatively expensive Nordic country. A 10,000 kr. note would be welcomed by many in business. The use of cash in Iceland is generally very low, as debit and credit cards are accepted almost everywhere and even for very small transactions.
An artist has already created 10,000 kr banknotes for an exhibition in 2008; but they were clearly not legal tender, as one shop assistant found out.