South Korean won

The won (원) is the currency of South Korea. A currency called the won circulated in all Korea between 1902 and 1910. The won was first the currency of South Korea between 1945 and 1953, with the currently circulating won introduced in 1962. The won is subdivided into 100 jeon (전), although denominations in jeon are no longer used, except in foreign currency exchange rates. Its ISO 4217 code is KRW. The Latinized symbol for won, ₩, is made of a letter W with an equal sign ("="), which is abbreviated to a single dash sign ("–") in many cases. This symbol replaces the backslash character ("\") on Korean keyboards.

Etymology

First South Korean won

History

The won was first used as Korea's currency between 1902 and 1910. It was replaced at par by the yen, made up of the Japanese currency and banknotes of the Korean yen.

In 1945, Korea was divided, resulting in separate currencies, both called won, for the South and North. Both the Southern won and Northern won replaced the yen at par. The first South Korean won was subdivided into 100 jeon. Only banknotes were issued, which initially circulated 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:

The first South Korean won was replaced by the hwan on February 15, 1953 at a rate of 1 hwan = 100 won.

Banknotes

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

History

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.

Coins

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.^[3]

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.^[3]

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.^[3]

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.^[5] 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.^[6] The new coin was issued on December 18, 2006.^[7]^[8]

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.^[9]

Banknotes

The Bank of Korea designates banknote and coin series in an interesting 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, e.g. 가, 나, 다, 라, 마, 바, 사... Therefore, ₩1000 issued in 1983 is series II (나) 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.^[3]

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.^[3] 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.^[10] 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.^[3]

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 latest version of the 5000 and 10,000 won are easily identifiable by the copyright information inscribed under the watermark: "© 한국은행" and year of issue on the obverse, "© The Bank of Korea" and year of issue on the reverse.

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.^[10]^[11]^[12]

With the release of a new set of notes, no plan as yet been made to withdraw these notes from circulation.^[13]

Current banknotes

The Bank of Korea is releasing a set of smaller banknotes with a new design and improved security features starting in 2006. The decision was taken due to an increase of counterfeited notes detected of 50% every year between 1998 and 2004.^[14] The 5000 won notes were released on January 2, 2006, and the 1000 and 10,000 won notes were released on 22 January 2007. The 5000 won notes were released first because they were the most forged notes (2508 out of the 3153 forged notes detected in the 1st quarter of 2005, an increase of eighteenfold from the same time in the previous year) and they are circulating in a smaller volume (about 6% of all circulating notes).^[14]

Banknote Production

The current 10000 won note has King Sejong the Great as the portrait, the 5000 won note with Lee Yul Gok, and the 1000 won note with a scholar named Lee Tae Gye. The banknote size and with were reduced from the previous series. The new banknotes' designs and security features made the South Korean banknotes into one of the world's high-class banknotes. Because of the new banknote series, the country was busy replacing Bank ATMs, vending machines, exchanging old series notes into current notes to banks in Korea and internationally.

In South Korea, new, crisp banknotes are usually in banks of limited quantities for their customers to exchange them. But on Chuseok or Seollal, the Bank of Korea distributes new crisp banknotes to the public. A lot of people go to the bank to change their notes to crisp notes at Seollal to give to their children, nephews, etc.

Security features

South Korea boasts one of the most advanced security features on their banknotes, with over 10 security features in each denomination. The 10000 won note has 21 security features, the 5000 won note with 17, and the 1000 won note with 19. Even though most people know that the Swiss Franc is the most secure note in the world, the 10000 won note has 3 more features. Some security features inserted in South Korean won notes are:

For the first time in the world, the KOMSCO, the Korean mint, inserted a new substance in the notes to detect counterfeits which are now getting exported to Europe, North America, etc.^[15]

Contents

Etymology

First South Korean won

History

Banknotes

Second South Korean won

History

Coins

Banknotes

Current banknotes

Banknote Production

Security features

See also

References

External links