South Korean won

Etymology

The old "won" was a cognate of the Chinese yuan and Japanese yen. It is derived from the hanja 圓 (원), meaning "currency" or "coin." The won was subdivided into 100 jeon (Hangul: 전; Hanja: 錢; RR: jeon; MR: chŏn), itself a cognate of the Chinese character 錢 (qián) which means "money" and also used as a unit of money in ancient times. The current won (1962 to present) is typically written in hangul only.

History

During the Colonial era, the won was replaced at par by the yen, made up 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.

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. Republic of Korea Banknotes 5th Edition

Banknotes

In 1946, the Bank of Joseon introduced 10 and 100 won notes. These were followed in 1949 by 5 and 1,000 won notes.

A new central bank, the Bank of Korea, was established on 12 June 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 1,000 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.

History

The won was reintroduced on June 10, 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.

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.

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.

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 aluminium 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. However, they are still in production, minting limited amounts of these two coins every year, for the Bank of Korea's annual mint set.

In 1998, the production costs per coin were 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 100 won coins have exactly the same shape as the U.S. quarter, the only difference is the composition, with the 100 won coin struck in cupronickel rather than the U.S. quarter's cupronickel-clad composition.

Banknotes

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, it assigns series number X to the Xth design of a given denomination. The series numbers are expressed with Korean letters used in alphabetical order, e.g. 가, 나, 다, 라, 마, 바, 사. Therefore, ₩1,000 issued in 1983 is series II (나) because it is the second design of all ₩1,000 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 UK by Thomas De La Rue. 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 1960s 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 5,000 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 intaglio printed. The release of 10,000 won notes was planned to be at the same time as the 5,000 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 1,000 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. 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 5,000 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 5,000 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 5,000 won notes were produced in Japan while the ones for the 1,000 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.

New series

In 2006, it became a major concern that the Korean won banknotes were being counterfeited/forged. Notably, around 50% of 5,000 won notes (worth about US$5) were confiscated as counterfeit. This led the government to issue a new series of banknotes, with the 5,000 won note being the first one to be redesigned. Later in 2007, the 1,000 and the 10,000 won note was introduced.

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 Korean 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. The release of the 50,000 won note stirred some controversy among shop owners and those with visual impairments due to its similarity in color and numerical denomination with the 5,000 won note.

100,000 won notes were also announced, but their release was later canceled due to the controversy over the banknote's planned image, featuring the Daedongyeojido map, and not including the disputed Dokdo islands.

The banknotes include over 10 security features in each denomination. The 50,000 won note has 22 security features; the 10,000 won note 21; the 5,000 won note 17; and the 1,000 won note 19. Many modern security features that can be also found in Euros, Pound sterling, Canadian dollar, and Japanese yen are included in the banknotes. Some security features inserted in 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. This technique is being exported to Europe, North America, etc.

1,000 won security features

1. Intaglio Latent Image: From the position of eyes, if we look askance at the note, "WON" appears, thanks to a special intaglio printing method.
2. Windowed Security Thread: The security thread is a plastic film with hologram letters. It is exposed at the left side of the portrait on the obverse regularly.
3. CSI(Color Shifting Ink): Because of special ink, which is mixed with different material having different reflection to the light, the color of face value number changes green to blue
4. See-through Register: Patterns are printed in the same place on both sides of the note. Holding the note up to the light, the shapes on the obverse and reverse will combine to make a completed Taegeuk.
5. Micro Lettering: Difficult to see with the naked eye, but can be discerned with a magnifier. It appears as a line or dotted line when forged by color printer or color copier.
6. Watermark: Held up to the light, a hidden reverse image portrait appears in the non-image space on the left side of the obverse, thanks to the variation in thickness within each note.
7. Special Press and Soldering: Without holding the note up to the light, the watermark can still be read because of higher differences in paper thickness.
8. Intaglio Printing: A special method applying ink to a concave plate. The slightly raised figures produced can be felt.
9. Fluorescent Security Fiber: Fluorescent fibers are inserted into the paper. Under ultraviolet light, it is possible to see the fluorescent fibers scattered throughout.
10. Endless Pattern: A printing method inter-linking the pattern between top and bottom, right and left around the edge of the note.
11. Rainbow Printing: A printing method whereby color gradients give a rainbow-like effect.

5,000 won note security features

1. Hologram (OVD: Optically Variable Device): Changing designs at different angles. At different angles, "map of Korea," "face value number and Taegeuk (the Great Absolute)," and "Four signs of divination" can be seen.
2. Color Shifting Ink: Depending on the angle, the value (5,000) on the reverse changes between gold and green.
3. Intaglio latent image: From the position of eyes, if we look askance at the note, "WON" appears, thanks to a special intaglio printing method.
4. Security Thread: Held up to the light, the banknote shows microletters within a thin fluorescent plastic film.
5. See-through Register: Patterns are printed in the same place on both sides of the note. Holding the note up to the light, the shapes on the obverse and reverse will combine to make a completed Taegeuk.
6. Micro Lettering: Difficult to see with the naked eye, but can be discerned with a magnifier. It is appeared as a line or dotted line when forged by color printer or color copier.
7. Watermark: Held up to the light, a hidden reverse image portrait appears in the non-image space on the left side of the obverse, thanks to the variation in thickness within each note.
8. Special Press and Soldering: Without holding the note up to the light, the watermark can still be read because of higher differences in paper thickness.
9. Watermark Bar: Held up to the light, three horizontal dark bars and two bright bars appear in turn, thanks to the variation in thickness within each note.
10. Intaglio Printing: A special method applying ink to a concave plate. The slightly raised figures produced can be felt.
11. Fluorescent Security Fiber: Fluorescent fibers are inserted into the paper. Under ultraviolet light, it is possible to see the fluorescent fibers scattered throughout.
12. Endless Pattern: A printing method inter-linking the pattern between top and bottom, right and left around the edge of the note.
13. Rainbow Printing: A printing method whereby color gradients give a rainbow-like effect.

10,000 won security features

1. Hologram (OVD: Optically Variable Device): Changing designs at different angles. At different angles, "map of Korea," "face value number and Taegeuk (the Great Absolute)," and "Four signs of divination" can be seen.
2. Color Shifting Ink: Depending on the angle, the value (10,000) on the reverse changes between gold and green.
3. Intaglio Latent Image: From the position of eyes, if we look askance at the note, "WON" appears, thanks to a special intaglio printing method.
4. Security Thread: Held up to the light, the banknote shows microletters within a thin fluorescent plastic film.
5. See-through Register: Patterns are printed in the same place on both sides of the note. Holding the note up to the light, the shapes on the obverse and reverse will combine to make a completed Taegeuk.
6. Micro Lettering: Difficult to see with the naked eye, but can be discerned with a magnifier. It is appeared as a line or dotted line when forged by color printer or color copier.
7. Watermark: Held up to the light, a hidden reverse image portrait appears in the non-image space on the left side of the obverse, thanks to the variation in thickness within each note.
8. Special Press and Soldering: Without holding the note up to the light, the watermark can still be read because of higher differences in paper thickness.
9. Watermark Bar: Held up to the light, three horizontal dark bars and two bright bars appear in turn, thanks to the variation in thickness within each note.
10. Intaglio Printing: A special method applying ink to a concave plate. The slightly raised figures produced can be felt.
11. Fluorescent Security Fiber: Fluorescent fibers are inserted into the paper. Under ultraviolet light, it is possible to see the fluorescent fibers scattered throughout.
12. Endless Pattern: A printing method inter-linking the pattern between top and bottom, right and left around the edge of the note.
13. Rainbow Printing: A printing method whereby color gradients give a rainbow-like effect.

50,000 won security features

1. Holographic strip (Optically Variable Device): The holographic strip is a special film applied on the left end of the obverse. On the top, middle and bottom of the strip, are three sets of changing images: "map of Korea," "taegeuk (two comma roundel)," and "the four trigrams." When the banknote is tilted, each of them appears in turn. Between the sets of changing images, the denomination, 50,000, is printed vertically on the strip. On the left top and bottom of the holographic strip, against a background of geometric guilloche, the words "BANK OF KOREA 50000" are printed vertically. A line of a Korean traditional lattice pattern is embossed on the strip's right end.
2. Moving image security thread ("Motion"): The 50,000 won note has a special blue and gray film with numerous Taegeuk patterns all over it. Taegeuk patterns move to the left and right when the note is tilted up and down, while moving up and down when the note is tilted to the left and right. When the note is held up to the light, the movement of the Taegeuk patterns appears more clearly.
3. Novel numbering: The sizes of the digits (numbers and letters) used in the serial number increase gradually from left to right.
4. Color-shifting ink: The color of the face value number (50,000) on the top right of the reverse changes between green and magenta when the note is tilted.
5. Watermark: Held up to the light, a hidden portrait (of Shin Saimdang), produced by using the variation in thickness of the note paper, appears in the non-image area on the left side of the obverse.
6. SPAS: Special Press and Soldering: SPAS is a kind of watermark, produced using the maximized thickness variations in the note paper. It is located on the right bottom of the watermark and if you hold the banknote up to a light source or look at it with the naked eye, the number "5" appears within the pentagon.
7. Intaglio Latent Image: If the note is held horizontally and tilted at eye level, the number "5" appears within the intaglio-printed pentagon.
8. Security thread: If the note is held up to the light, the micro letters "한국은행 BANK OF KOREA 50000" are printed within a special film hidden on the right side of the portrait.
9. Intaglio Printing: Granular texture can be felt when touching the portrait of Shin Saimdang, the Wolmaedo painting, letters, five lines of tactile marks and denomination numbers.
10. See Through Register: When the note is held up to the light, the round images on the obverse and reverse are combined, appearing as a two-comma roundel (Taegeuk).
11. Endless Pattern: Exact identical patterns are printed at the same places in the top and bottom and to the right and left, around the edges of the note. If the banknote is folded and connected to the top and bottom or to the right and left, the patterns overlap.
12. Rainbow Printing: To heighten the counterfeiting deterrent effect, a special printing method for mixing colors naturally in areas shared by two different colors is employed.
13. Fluorescent Security Ink, Fluorescent Security Fiber: When the note is illuminated with ultraviolet light, fluorescent green (security ink) on the grape painting and short fluorescent red, blue and green lines (fluorescent security fibers) show all over the banknote.
14. Filter Through Latent Image: Through a specially produced filter, we can observe the hidden face value number "50000" in the non-image area of the reverse.
15. Micro Lettering: Intaglio-printed micro letters (consonants of Korean alphabets and "BANK OF KOREA") and offset-printed micro letters ("50000") can be discerned with a magnifying glass.

Currency production

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.