Korean currency history

The Korean currency story begins around the time of Koryo Dynasty (918-1392), in which the first coin were prepared. The first legal paper money was introduced during the Joseon Period (1392-1897). Instead of coins, it was used as a means of trade until it was abolished in the early 16th century.

The Korean currency has undergone several changes over time to the present day. These were due to political and economic events that influenced the country even after the division into North Korea and South Korea .

history

The history of the Korean currency begins with the Goryeo period (918–1392 AD), when coins from the Chinese Song dynasty (960–1279 AD) were imported and put into circulation. Before that time, barter based on rice and cloth was the most important means of trade.

Even so, Chinese coins that are 2,000 years old have been found in the ancient Korean tombs, proving that the people of Korea were familiar with coins. The first coins actually minted in Korea occurred during the reign of King Seonjeong (996 AD). These were cast in bronze and iron and were based on the common Chinese coin, which was round with a square hole in the middle.

During the reign of Taejong , Korea issued its first paper money in 1401. The banknotes, also called jeohwa, were made from black mulberry bark and used instead of coins. Bronze coins were not reintroduced until 1423, during the reign of King Sejong . These coins had the inscription Chosun Tong Bo ("Chosun Currency"). Coins minted in the 17th century eventually became a success and formed a large part of the exchange system after that time. In 1633 the moon became the main currency of Korea. Copper and bronze coins were issued in this currency unit.

Mun (1633-1892)

In 1633 the moon, which has become most representative of the coinage of Korea, was first cast. The coins with the inscription Sang Pyeong Tong Bo (literally translated: “always exact coin”) were used for more than 250 years (1633–1891 AD), which is longer than any other coin in Korean history. The Mun is similar to the Chinese Wen (related to the Japanese Mon and Vietnamese Van). The coins were cast in copper or bronze and were round with square holes. The Mun was replaced with the introduction of the Yang in 1892.

Yang (1892-1902)

→ Main article: Yang (coin)

The Yang was the currency of Korea between 1892 and 1902, which was divided into 10 Jeon, 100 Bun and 5 Yang = 1 Hwan. Previously, in 1888, a small number of coins, Hwan and Mun, were minted. These coins were the first modern coins made of pewter in various sizes and denominations , 5 of them gold-plated, 5 silver-plated and 5 copper-plated. In 1892, the yang was introduced as the main currency, although it has been used once in the past. The Yang is related to the Chinese Tael (Liang in Chinese). One yang was divided into 100 fun, which led to the first Korean decimal currency . Fun is related to the Chinese word Fen and refers to 1/100 of a Chinese yuan in the modern context. The coins all bore the title of the state "Great Joseon" (Great Korea), followed by "Joseon" (= Korea) and then "Daehan" (= Korea). The dynastic dating system was used until 1897, and thereafter the year with the regency name. A number of banknotes were printed by the Treasury Department but never issued. The contact with the West was the result of the circulation and circulation of the modern currency in the final years of the old Korean Empire.

Won (1902-1910)

Half Korean Won (1905)

With the rate of 5 Yang = 1 won, the won replaced its predecessor in 1902. Seven years later, the Bank of Korea was founded, which in the capital Seoul, as a central bank, issued well-founded and more modern types of currency. The new currency was equal in value to the Japanese yen , but was then replaced by the Korean yen in 1910. In addition to this means of payment, there were also Korean yen banknotes that were in circulation at the same time by the Dai Ichi Bank.

Yen (1910-1945)

100 Korean yen (1938)

In 1902, the Dai-Ichi Bank, which regulated the Korean government's customs duties, obtained permission from the Korean government to issue banknotes in yen (1, 5, and 10 yen). These were convertible to the Japanese currency at a ratio of 1: 1, with the total amount of the issue being set at 1.3 million yen.

In 1909, the Bank of Korea was established in Seoul as the central bank. In 1910, when Korea was annexed, the Korean won was abolished and replaced with the Japanese yen. After Korea lost its own sovereignty to Japan, the Bank of Korea was renamed Chōsen Ginko . The Japanese yen was used until the end of World War II in 1945. Shaped by Japanese dominance, the country's economy changed and thus also brought about a change in the Korean currency system .

The Korean won replaced the yen and the smaller currency unit Sen . By dividing Korea into a north and a south part, the payment system with a constant face value split into South Korean won and North Korean won.

North Korean won (since 1947)

5 North Korean Won (1998)

North Korea used the Korean yen for two more years after the country was divided. On December 6, 1947, the Central Bank of the Democratic People's Republic of Korea was founded and a new national currency was introduced. The exchange rate was the same as that of the Soviet ruble , but was revalued at a rate of 100: 1 in February 1959. New won were issued. The new national currency experienced several losses in value in the years that followed, caused by the subsequent depreciation and predomination of the Soviet ruble.

5 North Korean Won (2002)

Since the exchange rates of the banks were similar to those of the black markets, the North Korean government was able to keep the exchange rate at 2.16 won to the US dollar between 1978 and 2001 . Runaway inflation eroded the Korean won to the point that it was supposedly worth the same as the South Korean won. Despite everything, other currencies, including the US dollar, are worth more on the black market than officially. According to reports by the BBC in 2009, only the Japanese yen and the US dollar were accepted as valid currency in some shopping centers in the capital, Pyongyang . In North Korea, the euro and Chinese yuan / renminbi should also be permitted for payments in April 2013 . However, since more renminbi are brought into the country than euros, change is given in renminbi.

South Korean won

Won (1945–1953)

1000 South Korean won (1950)

After the country was divided, the South Korean won replaced the Korean yen, which was assigned the smaller unit of currency, Jeon. In the sub-currencies from 5 Jeon to 100 Jeon, the new currency was largely issued with higher values after the currency management switched to the Bank of Korea in 1950.

In 1950 the Bank of Korea put the first banknote into circulation. This was printed by Japan's National Printing Bureau ; the following year it was taken over by the Korea Minting and Security Printing Corporation , which was founded for this purpose.

When the won was introduced in 1945, it had the same exchange rate as Japan, namely 1 won = 1 yen, but in October of the same year it was decided to change to the US dollar as the reference currency with the ratio 15 won = 1 dollar. At the end of the Korean War , the won lost value drastically, so that it stood at 6000 won = 1 dollar. When the new currency, the hwan, was introduced, the exchange rate was 1 hwan = 100 won.

Hwan (1953–1962)

1000 South Korean Hwan (1960)

On February 15, 1953, the Hwan was introduced at a rate of 1 Hwan = 100 won due to the depreciation of the won. This was divided into 100 Jeon, but they were never used. The issuance of new banknotes with denominations between 10 and 1000 Hwan took place. In 1959, South Korea introduced coins to replace lower sub-currencies for the first time. Since the currency lacked the ability to exchange, the first issues of the banknotes were picked by the United States Government Printing Office . It was issued in five sub-currencies with the same design, some of which were later adapted to the Korean theme. The new 100 Hwan banknote followed a month later. Already during the introduction the exchange rate was 60 Hwan = 1 dollar, which deteriorated by the end of the currency to 1250 Hwan = 1 dollar and led to the reintroduction of the won in 1962 with 10 Hwan = 1 won.

South Korean currency

The coins of the 10 Hwan and 50 Hwan remained in circulation until March 21, 1962.

Won (from 1962)

On June 10, 1962, the won was reintroduced as the official currency of South Korea, as the hwan lost too much of its value and the value was still based on the US dollar. This orientation was retained as a free currency until December 24, 1997. However, the won lost almost half of its value due to the Asian crisis .

Temporal overview of the currency units in Korea

period	Smaller currency unit				Main currency unit			Parent currency unit				comment
period	English	Hanja	Hangul	relationship	English	Hanja	Hangul	English	Hanja	Hangul	relationship	comment
1892-1902	fun	分	푼	1/100	yang	兩	냥	hwan	圜	환	5
1902-1910	chon	錢	전	1/100	won	圓	원	No				1 won = 5 yang from the previous period
1902-1945	sen	錢	N / A	1/100	yen	圓	N / A	No				1 yen = 1 won = 5 yang
1902-1945	Due to the Japanese rule, the English translations are based on the Japanese and Chinese phonetic spelling.
North Korea 1945 – today	chon	錢	전	1/100	won	圓	원	No				1 won = 1 yen in 1945 1 new won = 1 old won in 1959. Hanja usage disappeared after 1959.
South Korea 1945-1953	chon	錢	전	1/100	won	圓	원	No				1 won = 1 yen
South Korea 1953-1962	chon	錢	전	1/100	hwan	圜	환	No				1 hwan = 100 won from the previous period
South Korea 1962 – today	jeon	錢	전	1/100	won	N / A	원	No				1 won = 10 hwan of the previous period
Bold = actual imprint on the banknotes and embossing on the coins This is a translated version.

literature

The Bank of Korea: KOREAN CURRENCY: for better understanding of Korean currency, 01/23/2013 - e-book

Web links

Individual evidence

↑ ^a ^b ^c Korean Coins. Ancient Chinese Charms and Coins website, November 16, 2016, accessed January 27, 2017 .
↑ ^a ^b ^c On the development of Korean money II: Late Joseon period to the present. In: KBS World website. September 3, 2011, accessed January 28, 2017 .
^ The Bank of Korea: KOREAN CURRENCY: for better understanding of Korean currency . Google Commerce Ltd, January 23, 2013, p. 89 .

[:1-1] Korean Coins. Ancient Chinese Charms and Coins website, November 16, 2016, accessed January 27, 2017 .

[:3-2] On the development of Korean money II: Late Joseon period to the present. In: KBS World website. September 3, 2011, accessed January 28, 2017 .

[:2-3] The Bank of Korea: KOREAN CURRENCY: for better understanding of Korean currency . Google Commerce Ltd, January 23, 2013, p. 89 .