The won (sign: ₩; code: KRW) is the currency of South Korea. A single won is divided into 100 jeon, the monetary subunit. The jeon is no longer used for everyday transactions, and appears only in foreign exchange rates. One South Korean won (as of the 25th May 2010) is equal to 0.114364 North Korean won.
"Won" is a cognate of the Chinese yuan and Japanese yen. All three names derive from the Chinese character , which means "round shape." The won was subdivided into 100 jeon (Hangul; Hanja; RR: jeon; MR: chŏn), which means "money"; this word is also of Chinese origin and refers to the bronze and copper coins of old.
First South Korean won
The won has been in use for thousands of years. After the Japanese annexation in 1910 and subsequent occupation, the won was replaced at par by the yen, made up of the Japanese currency and banknotes of the Korean yen.
In 1945 after World War II, Korea became divided, resulting in two separate currencies, both called won, for the South and the North. Both the Southern won and the Northern won replaced the yen at par. The first South Korean won was subdivided into 100 jeon. Only banknotes were issued, initially circulating alongside banknotes of both the Japanese and Korean yen and Japanese coins.
The South Korean won was initially pegged to the U.S. dollar at a rate of 15 won = 1 dollar. A series of devaluations followed, the later ones in part due to the Korean war. The pegs were:
|Pegs for the first South Korean won
||Value of U.S. dollar in won
|July 15, 1947
|October 1, 1948
|June 14, 1949
||900 (non-government transactions only)
|May 1, 1950
|November 1, 1950
|April 1, 1951
The first South Korean won was replaced by the hwan on February 15, 1953 at a rate of 1 hwan = 100 won.
In 1946, the Bank of Joseon introduced 10 and 100 won notes. These were followed in 1949 by 5 and 1000 won notes. The designs were similar to those of the yen notes from the Japanese occupation period. However, there were two subtle and important differences. The new notes replaced the paulownia, the badge of the government of Japan, with the five-petalled Rose of Sharon, South Korea's national flower. The clause referring to exchangeability with the Japanese yen was also removed.
A new central bank, the Bank of Korea, was established in 1950, and assumed the duties of Bank of Joseon. Notes were introduced (some dated 1949) in denominations of 5, 10 and 50 jeon, 100 and 1000 won. 500 won notes were introduced in 1952. In 1953, a series of banknotes was issued which, although it gave the denominations in English in won, were, in fact, the first issues of the hwan.
Second South Korean won
The won was reintroduced on June 9, 1962 at a rate of 1 won = 10 hwan. It became the sole legal tender on March 22, 1975 with the withdrawal of the last circulating hwan coins. Its ISO 4217 code is KRW. At the reintroduction of the won in 1962, its value was pegged at 125 won = 1 U.S. dollar. The following pegs operated between 1962 and 1980.
|Pegs for the second South Korean won
||Value of U.S. dollar in won
|June 10, 1962
|May 3, 1964
|August 3, 1972
|December 7, 1974
|January 12, 1980
On February 27, 1980, efforts were initiated to lead to a floating exchange rate. The won was finally allowed to float on December 24, 1997 when an agreement was signed with the International Monetary Fund.Shortly after, the won was devalued to almost half of its value, as part of the East Asian financial crisis.
Until 1966, 10 and 50 hwan coins, revalued as 1 and 5 won, were the only coins in circulation. New coins, denominated in won, were introduced by the Bank of Korea on August 16, 1966 in denominations of 1, 5 and 10 won, with the 1 won struck in brass and the 5 and 10 won in bronze. These were the first South Korean coins to display the date in the Common era, earlier coins having used the Korean calendar. The 10 and 50 hwan coins were demonetized on March 22, 1975.
In 1968, as the intrinsic value of the brass 1 won coin far surpassed its face value, new aluminium 1 won coins were issued to replace them. As an attempt to further reduce currency production costs, new 5 won and 10 won coins were issued in 1970, struck in brass. Cupro-nickel 100 won coins were also introduced that year, followed by Cupro-nickel 50 won in 1972.
In 1982, with inflation and the increasing popularity of vending machines, 500 won coins were introduced on June 12, 1982. In January 1983, with the purpose of standardizing the coinage, a new series of 1, 5, 10, 50, and 100 won coins were issued, using the same layout as the 500 won coins, but conserving the coins old themes.
The Bank of Korea announced in early 2006 its intention to redesign the 10 won coin by the end of that year. With the increasing manufacturing price, then at 38 won per 10 won coin, and rumors that some people had been melting the coins to make jewelry, the redesign was needed to make the coin more cost effective to produce.The new coin is made of copper-coated aluminum with a reduced diameter of 18 mm, and a weight of 1.22 g. Its visual design is the same as the old coin.The new coin was issued on December 18, 2006.
The 1 and 5 won coins are difficult to find in circulation today and prices of consumer goods are rounded to the nearest 10 won.
In 1998, the production costs per coin were are as follows: 10 won coins each cost 35 won to produce, 100 won coins cost 58 won, and 500 won coins cost 77 won.
The Bank of Korea designates banknote and coin series in a unique way. Instead of putting those of similar design and issue dates in the same series, they assign series number X to the Xth design of for each individual value. The series numbers are expressed with Korean letters used in alphabetical order. Therefore, ₩1000 issued in 1983 is series II because it is the second design of all ₩1000 designs since the won introduction in 1962.
In 1962, 10 and 50 jeon, 1, 5, 10, 50, 100 and 500 won notes were introduced by the Bank of Korea. The first issue of 1, 5, 10, 50, 100 and 500 won notes were printed in the U.K. by Thomas De La Rue Company. The jeon notes together with a second issue of 10 and 100 won notes were printed domestically by the Korea Minting and Security Printing Corporation.
In 1965, 100 won notes (Series III) were printed using intaglio printing techniques, for the first time on domestically printed notes, to reduce counterfeiting. Replacements for the British 500 won notes followed in 1966 also using intaglio printing, and for the 50 won notes in 1969 using litho-printing.
With the economic development from the 60s the value of the 500 won notes became lower, resulting in a greater use of cashier's checks with higher fixed denominations as means of payment, as well as an increased use of counterfeited ones.In 1970, the 100 won notes were replaced by coins, with the same happening to the 50 won notes in 1972.
Higher denomination notes of 5000 won and 10,000 won were introduced in 1972 and 1973 respectively. The notes incorporated new security features, including watermark, security thread and ultraviolet response fibres and were inglio printed. The release of 10,000 won notes was planned to be at the same time as the 5000 won notes but problems with the main theme delayed it by a year.Newly designed 500 won notes were also released in 1973 and the need for a medium denomination resulted in the introduction of 1000 won notes in 1975.
In 1982, the 500 won note was replaced by a coin. The following year, as part of its policy of rationalizing the currency system, the Bank of Korea issued a new set of notes, as well as a new set of coins (see above). Some of the note's most notable features were distinguishable marks for the blind under the watermark and the addition of machine-readable language in preparation for mechanization of cash handling. They were also printed on better quality cotton pulp to reduce the production costs by extending their circulation life.
To cope with the deregulation of imports of color printer and the increasing use of computers and scanners, modified 5000 won and 10,000 won notes were released between 1994 and 2002 with various new security features, which included: color-shifting ink, microprint, segmented metal thread, moiré, and EURion constellation.
The plates for the 5000 won notes were produced in Japan while the ones for the 1000 and 10,000 won notes were produced by the Korea Minting and Security Printing Corporation. They were all printed in intaglio.
With the release of a new set of notes, no plan has yet been made to withdraw these notes from circulation.
The Bank of Korea is the only institution in South Korea that has the right to print banknotes and mint coins. The banknotes and coins are printed at KOMSCO, a government-owned corporation, under the guidance of the Bank of Korea. After the new crisp banknotes and coins are printed/minted, they are bundled up in bundles/rolls and shipped to the Headquarters of the Bank of Korea. When delivered, the banknotes and coins are deposited inside the Bank's vault, ready to be distributed to commercial banks when requested. Every year, around Seollal and Chuseok, two major Korean holidays, the Bank of Korea distributes large amount of its currency to most of the commercial banks in South Korea, which are then given to their customers upon request.
The New Korean Won Series
In 2006, it became a major concern that the Korean won banknotes were being counterfeited/forged. Notably the 5000 won note (worth about US$5), over 50% of the notes were confiscated as counterfeit. This led the government to issue a new series of banknotes, with the 5000 won note being the first one to be redesigned. Later in 2007, the 1000 and the 10000 won note was introduced.
The banknotes include over 10 security features in each denomination. The 10000 won note has 21 security features, the 5000 won note 17, and the 1000 won note 19. Many modern security features that can be also found in Euros, Pound sterling, Canadian dollar, Japanese yen are included in the banknotes. Some security features inserted in won notes are:
- Holograms with 3D images that change colors within the metallic foil on the obverse side of the notes(exception of 1000 won)
- Watermark portraits of the effigy of the note is visible when held to the light in the white section of the note
- Intaglio printing on words and the effigy give off a raised feeling, different than ordinary paper
- Security thread in the right side of the obverse side with small lettering " Bank of Korea" and the denomination
- Color shifting ink on the value number at the back of the note
For the first time in the world, the KOMSCO, the Korean mint, inserted a new substance in the notes to detect counterfeits. This technique is being exported to Europe, North America, etc.
50,000 won note
On June 23, 2009, the Bank of Korea released the 50,000 Won note. The obverse bears a portrait of Shin Saimdang, a prominent 16th-century artist, calligrapher, and mother of Confucian scholar Yulgok, also known as Yi I, who is on the 5,000 Won note. This note is the first Korean banknote that features the portrait of a woman. 100,000 won notes were also announced, but their release was later canceled.The release of the 50,000 won note stirred some controversy among shop owners and those with visual impairments.
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