The South Korean won is the official currency of South Korea since 1945, although later it was temporarily replaced by hwan. One won is divided into 10 jeon but there are no jeon coins in circulation.
Origins and history of the South Korean won
To talk about the origins of the South Korean won we are to go back to the end of World War II in 1945 when Korea was divided in two: South and North. Each country would have a different currency, although it would be called "won" and replace yen in both countries.
The South Korean won was initially pegged to US dollar at a rate of 15 won for 1 US dollar. A series of devaluations followed partly due to the Korean War.
The first South Korean won was replaced by the hwan on 15th of February 1953 at a rate of 1 hwan for 100 won.
Back then the Bank of Joseon was in charge of minting coins and issuing notes. A new central bank, the Bank of Korea, was established in 1950. With it new denominations of banknotes were introduced. A year later a series of banknotes was issued which, although denominated in English as “won”, were, in fact, the first issues of the hwan.
On 9th June 1962 won was reintroduced at a rate of 1 KRW for 10 hwan. It became the sole legal tender in South Korea on 22d March 1975. At the reintroduction of won, its value was pegged at 125 won for 1 US dollar.
On 24th of December 1997 an agreement was signed with the International Monetary Fund to permit the free flow of the won. Shortly after the won was devalued to almost half of its initial value like many other Asian currencies due to the East Asian Financial crisis.
Banknotes and coins of the South Korean won
The authority in charge of minting coins and issuing banknotes is the Bank of Korea with headquarters in Seoul.
Today, coins in denominations of 1, 5, 10, 50, 100 and 500 won are in circulation. Regarding banknotes, denominations of 1,000, 5,000, 10,000 and 50,000 are in use.
Interesting facts about the South Korean won
- The old "won" is a cognate term of the Chinese yuan and Japanese yen. Both currencies are denoted by the same Chinese symbol, the one referring to the round characteristics of an object (coins, in this case).
- The term “jeon” means “money”.
- In 1945 the Bank of Joseon introduced banknotes in denominations of 10 and 100 won, followed by 5 and 1,000 won. The design was very similar to that of the notes in circulation during Japanese invasion with two differences: paulownia, the emblem of the Japanese government, was replaced by the rose of Sharon, the national flower of Korea; the text referring to the interchangeability of the won with the Japanese yen was removed.
- In 1968 as the intrinsic value of 1 won brass coin surpassed its face value, new aluminium coins were minted to replace it.
- In 2006 many of the banknotes, such as 5,000 notes, were being counterfeited, prompting the Government to introduce a new series of banknotes with additional security features: holographic 3d imaging, watermarks, etc.
- On 23d June 2009 the Bank of Korea announced the issuance of 100,000 won notes but its introduction was cancelled at the last moment.