It seems that domestic banks do not handle the exchange of Icelandic króna. I suggest you contact the hotel in Vik and ask if they accept dollars or euros. It's best to do this, otherwise you'll only be left with Icelandic króna as souvenirs ?

Iceland FAQ

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I saw Icelandic króna for the first time at the airport tax refund. The only place that accepted cash was the toilet next to the waterfall.

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