The Korean Won: Understanding South Korea's National Currency

When discussing the currency of South Korea, most people refer to the Korean won, officially abbreviated as KRW. This monetary unit serves as the backbone of South Korea’s economy and maintains a significant presence in global foreign exchange markets. The Korean won’s evolution over the past century reflects the nation’s political transformations and economic development.

Historical Evolution of the Won

The monetary history of South Korea’s currency is quite fascinating. The original won was first introduced in 1902 during the final years of the Joseon Dynasty. Following Korea’s independence from Japanese occupation in 1945, authorities replaced the colonial-era yen with the hwan. However, this transition proved temporary. By 1953, the hwan was superseded by the modern won at an exchange rate of 1 won equaling 100 hwan—a decision that has remained in place ever since. Today, the Bank of Korea maintains full authority over the issuance and regulation of the won, ensuring its stability in both domestic and international markets.

Physical Denominations and Design

The won exists in both metallic and paper forms, each serving distinct purposes in everyday transactions. Coins are minted in four values: ₩10, ₩50, ₩100, and ₩500, while banknotes circulate in higher denominations of ₩1,000, ₩5,000, ₩10,000, and ₩50,000. The banknote designs showcase revered Korean historical figures—Sejong the Great, Yi Hwang, and Shin Saimdang—each representing different periods of Korean cultural achievement.

The Won’s Role in Global Finance

In today’s interconnected financial system, the currency of South Korea commands considerable attention among traders and investors worldwide. As one of the planet’s most actively traded currencies, the won responds dynamically to macroeconomic indicators, geopolitical developments, and speculative trading patterns. Its exchange rate against major currencies like the US dollar and Japanese yen carries substantial implications for South Korea’s export competitiveness and foreign investment flows. Understanding these dynamics provides crucial context for anyone tracking Asian financial markets or doing business with South Korea.