North Korean Money: The Fascinating World of the Won 💰

Introduction

Welcome, curious readers and financial enthusiasts! Today, we're embarking on a journey into one of the world's most mysterious monetary systems - North Korean currency. 🌏 As one of the most secretive nations on Earth, North Korea's economic structure, including its currency, remains enigmatic to much of the outside world. But that's exactly why exploring this topic is so fascinating!

Have you ever wondered what money looks like in the Democratic People's Republic of Korea (DPRK)? How it works? Or perhaps how it compares to other currencies worldwide? If so, you've come to the right place! This comprehensive guide will walk you through everything you need to know about North Korean money, from its history and denominations to its unique characteristics and global position.

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The History of North Korean Currency

Early Beginnings

North Korea's currency, the won (₩), has a complex history that mirrors the nation's own turbulent past. The term "won" itself dates back to the Korean Empire (1897-1910) and was derived from the Chinese yuan. However, the North Korean won as we know it today didn't emerge until after the division of Korea following World War II.

Post-War Development

After the peninsula was divided along the 38th parallel in 1945, North Korea established its own central bank (the Central Bank of the Democratic People's Republic of Korea) in 1946 and introduced its first won. Initially, the North Korean won was pegged to the Soviet ruble, reflecting the strong political and economic ties between North Korea and the Soviet Union.

Currency Reforms and Crises

Throughout its history, the North Korean won has undergone several significant reforms:

1. 1959 Reform: The first major currency reform reduced the value of the won by 100:1.
2. 1979 Reform: Another adjustment to address economic challenges.
3. 2009 Reform: Perhaps the most devastating reform, when the government suddenly announced a redenomination that effectively wiped out many citizens' savings.

The 2009 currency reform deserves special attention. With very little warning, North Koreans were told to exchange their old notes for new ones at a rate of 100:1, with strict limits on how much could be exchanged. This sudden move was catastrophic for many who had saved cash outside the banking system, effectively erasing their life savings overnight.

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North Korean Won: Denominations and Features

Banknotes

North Korean banknotes come in various denominations, each with distinctive designs that reflect the country's ideology and leadership cult:

• 5 won: Features the Arch of Triumph in Pyongyang
• 10 won: Depicts the birthplace of Kim Il-sung at Mangyongdae
• 50 won: Shows the Tower of the Juche Idea
• 100 won: Portrays Kim Il-sung, the country's founder
• 200 won: Introduced more recently
• 500 won: Larger denomination
• 1,000 won: Highest common denomination
• 2,000 won: Introduced after the 2009 reform
• 5,000 won: One of the highest denominations

The design elements on North Korean currency are heavily influenced by the state's propaganda themes. Unlike most countries' currency, which might feature various historical figures, North Korean won primarily celebrates the Kim dynasty and revolutionary monuments.

Coins

North Korean coins exist in smaller denominations:

• 1 chon
• 5 chon
• 10 chon
• 50 chon
• 1 won

However, due to hyperinflation, coins have largely disappeared from daily circulation, with most transactions now involving paper money only.

Security Features

While many modern currencies incorporate sophisticated anti-counterfeiting measures, North Korean won has relatively simple security features. This includes watermarks, security threads, and special printing techniques. The limited international exposure of the currency means counterfeiting is primarily a domestic concern rather than an international one.

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The North Korean Won in Context: A Unique Economic System

State-Controlled Economy

To understand North Korean money, it's essential to recognize that it operates within a highly centralized, state-controlled economy. Unlike market-driven economies where currency value is determined by supply and demand, the North Korean won's value is artificially set by the government.

Dual Currency System

Interestingly, North Korea effectively operates a dual currency system:

1. Official Currency: The North Korean won used by citizens for everyday transactions
2. Foreign Currency Economy: A parallel system where Chinese yuan, US dollars, and Euros are used in special economic zones, tourist areas, and among the elite

This dual system reflects the dichotomy between the official state economy and the growing informal market economy that has emerged in recent decades.

Exchange Rates and International Value

The official exchange rate of the North Korean won bears little resemblance to its actual value. While the government might publish an official rate, the black market rate (which more accurately reflects the currency's true value) can be hundreds of times different.

For example, the official exchange rate might be around 100 won to the US dollar, while the black market rate could be 8,000 won or more to the dollar. This extreme disparity highlights the economic challenges facing the country and the unrealistic nature of official economic statistics.

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Daily Life and North Korean Currency

Shopping and Transactions

How do ordinary North Koreans use their currency in daily life? Shopping experiences in North Korea differ dramatically from those in most other countries. State-run stores with fixed prices exist alongside increasingly common markets (known as "jangmadang") where prices fluctuate based on supply and demand.

Basic necessities might be purchased with won, but any luxury items or imported goods typically require foreign currency. This creates a two-tiered consumption system where access to foreign currency determines one's ability to purchase better quality or more desirable goods.

Wages and Purchasing Power

The average North Korean worker might earn between 2,000 and 6,000 won per month in the official economy. However, with market prices for essential goods often much higher than what state wages can cover, many North Koreans rely on unofficial income sources or remittances from relatives abroad.

To put this in perspective, a kilogram of rice might cost more than 8,000 won on the black market—more than a month's salary for many workers. This disparity explains why participation in market activities and access to foreign currency have become crucial for survival.

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Collecting North Korean Currency

Numismatic Interest

Despite—or perhaps because of—the secretive nature of North Korea, there's significant collector interest in North Korean currency. Genuine North Korean banknotes and coins can be fascinating additions to numismatic collections, representing one of the world's most isolated economies.

Challenges and Legalities

Collecting North Korean currency presents unique challenges:

1. Authenticity: With limited reference materials available, verifying authentic North Korean currency can be difficult.

2. Legality: Depending on your country's relations with North Korea, there may be restrictions on importing North Korean goods, including currency.

3. Ethical considerations: Some collectors question whether purchasing such items indirectly supports the North Korean regime.

Commemorative Issues

North Korea occasionally issues commemorative currency for special events or anniversaries related to the leadership or significant national achievements. These special issues are particularly sought after by collectors but can be extremely difficult to obtain outside the country.

North Korean Money: Myths and Realities

Common Misconceptions

There are many myths surrounding North Korean currency:

Myth 1: North Korea doesn't use money. Reality: Despite its command economy, North Korea does use currency for many transactions.

Myth 2: All North Korean money features Kim Jong-un. Reality: While the leadership is prominently featured, many banknotes depict monuments, landscapes, and revolutionary symbols.

Myth 3: Foreign currency is illegal in North Korea. Reality: While officially discouraged, foreign currency use is widespread and sometimes tacitly accepted by authorities.

The Future of North Korean Currency

What does the future hold for the North Korean won? Economic observers suggest several possibilities:

1. Further reforms: The government may implement additional currency reforms to address ongoing economic challenges.

2. Increased dollarization: The unofficial use of foreign currencies might continue to grow.

3. Digital currency development: Some reports suggest North Korea has shown interest in cryptocurrency as a means to evade international sanctions.

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Conclusion

North Korean money represents far more than just a medium of exchange—it's a window into one of the world's most closed societies and unique economies. From its carefully designed propaganda imagery to its volatile value and the dual economy it operates within, the North Korean won tells a fascinating story of a nation unlike any other.

While most of us will never handle North Korean currency in our daily lives, understanding its complexities helps us better comprehend the broader economic and political realities of this isolated nation. It also reminds us of the importance of financial stability and transparency—qualities that are often taken for granted in other economies around the world.

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Thank you for joining me on this fascinating exploration of North Korean money! 🌍💱

Disclaimer: This article is for informational purposes only and should not be construed as financial or investment advice.