This past July I spent two weeks in Iceland. A few days in Reykjavík and then the entire Ring Road. I did not use any Icelandic money at anytime at all - paper currency or coins in the entire time I was there. Even rest rooms, if they charged, took credit cards. In fact, some left you no alternative - credit card machine, no human person.n. I think it was the first time I ever charged a pee!
While in Reykjavík at the start of my trip, I did a short city tour. I asked the guide where I could find an ATM to obtain some Icelandic currency. He emphatically said there was no need for any currency. He even showed me his wallet and there was one piece of paper currency in it. He said he had that piece of currency for a few months, and never needed it. I followed his advice and was never sorry for doing so.