A Brief History of the Korean Won

The Korean Won has had a few different iterations.  The very first (short-lived) appearance of the Won was in 1902.  The name is derived from the Chinese yuan and the Japanese yen. In 1909, it began to be distributed by the new Bank of Korea.  However, with the Japanese annexation of Korea is 1910, the won was quickly replaced by the Japanese yen.

The yen remained the official currency of Korea until the end of World War II. After the defeat of Japan by the Allies, Korea was set free, with the states of North and South Korea eventually becoming officially recognized.  Both countries re-adopted the won as their official currency.

Once again, however, the life of the won was to be short-lived.  Devaluation of the won was rapid, taking a major hit due to the Korean war.  At its introduction, the won was pegged at 15 won= 1 dollar.  By 1951, the peg was 6000 won = 1 dollar.  This led to the won being replaced in 1953 by the hwan, with hopes of stabilizing the currency.

Unfortunately, the same devaluation problems that plagued the won also affected the new hwan.  In another attempt to fix the issues, the government once again returned to the won in 1962.  The won has remained the official currency of South Korea since that time. The won remained pegged to the US dollar until 1997.

Compared to other countries, the Korean won has some of the fewest denominations. The currency is distributed by the Bank of Korea, which currently issues only 4 denominations of banknotes (1000, 5000, 10000, and 50000) and 6 denominations of coins (1, 5, 10, 50, 100, 500).  Since the won was divided into 100 equal parts (called jeon), the 1 and 5 were originally necessary. However, jeon is currently only used in the foreign market, and the two smallest denominations are so rarely used that they are almost completely out of circulation. The 500 coin was introduced in 1982 due to inflation – and to the rise in popularity of vending machines in Korea.  The 50,000 won banknote was introduced in 2009.  It is of particular importance because it was the first time in Korean currency history that a banknote featured a woman (Shin Saimdang, a popular 16th century artist).