Reiðufé

Reiðufé is the Icelandic term for cash, referring to the physical money used in everyday transactions. It comprises banknotes and coins that are issued by and considered legal tender within Iceland. Reiðufé is distinct from electronic forms of money, such as bank deposits, card payments, or digital wallets.

In Iceland, reiðufé is supplied and managed under the authority of the Central Bank of Iceland in coordination with commercial banks. The infrastructure for handling cash includes banks, automatic teller machines, and cash-in-transit services. While cash use has declined in recent years as card payments and mobile payments have grown, reiðufé remains widely accepted for many purchases, especially small transactions or in situations where electronic systems are not available.

The use of reiðufé offers certain advantages, such as immediate settlement between buyer and seller and a degree of privacy in transactions. It also carries disadvantages, including the risk of loss or theft, security and handling costs, and limited traceability for large payments. Banks and retailers must balance these factors with broader regulatory objectives that govern financial transactions.

Legally, cash is generally accepted as payment, and anti-money-laundering regulations apply to large cash movements, requiring reporting to authorities where appropriate. Global trends toward cashless payments influence Iceland’s cash supply and usage, but reiðufé continues to play a role in everyday life, tourism, and rural areas where electronic options may be less convenient.