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Money is what everyone accepts as payment for goods or services, such as when people buy clothes or food.

Gold has long been part of the Central Bank’s international reserves. The international reserves are a kind of safety fund for the country in foreign currency.

The Central Bank needs to meet the demand for banknotes and coins in society. Individuals and companies withdraw cash from commercial banks or savings banks, e.g. at their ATMs, but banks and savings banks then withdraw the cash from the Central Bank.

The money supply in circulation is the money and liquid assets that are available in the economy and can be used immediately or soon in transactions.

Cash, i.e. banknotes and coins, is used relatively little in transactions in Iceland compared to the past and many other countries. It is common for banknotes to be used as gifts, such as at confirmations.

It requires a considerable amount of work to design and produce a new banknote, let alone a new series of banknotes. The appearance, patterns, images, and placement of features need to be determined to increase security in the handling of banknotes and to make counterfeiting more difficult.