http://www.iht.com/articles/2008/10/09/business/icebank.php
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Iceland was on the verge of doing exactly that on Thursday as the government shut down the stock market and seized control of its last major independent bank. That brought trading in the country's currency to a halt, with foreign banks no longer willing to take Icelandic krona, even at fire-sale rates.
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Iceland will probably have to get a bailout from somebody. Either the IMF, Europe or Russia is going to have to give them a big pile of money to help their government and to back their currency to make it worth something.

They have been talking to Russia, but I would guess that that a deal with Russia comes with too many strings attached. The EU has never done something like that before and would probably take too long. That leaves the IMF, which has been very quiet of late and short of money for the multiple bailouts they will probably need to make shortly. But Iceland is at the front of the list and probably just needs some money to tide them over till the banking system gets restarted internationally.

Jay