The Wayback Machine - https://web.archive.org/web/20060826081444/http://www.bok.or.kr:80/template/eng/html/index.jsp?tbl=tbl_FM0000000066_CA0000001020
HOMELINKSSITEMAPKOREAN
About BOK Monetary Policy Press Releases Financial System Payment Systems FX & Int Publications Currency
Korean Currency in Use
Security Features against Counterfeiting of BOK Notes
Currency Reproduction Guidelines
A Brief History of Korean Currency
Currency Issue System
The Bank of Korea Act(Extracts)
> Currency > Currency Issue System
detail search
According to the Bank of Korea Act, the primary purposes of the Bank are to maintain the stability of the value of money in the interests of national economic progress and to further economic progress and efficient utilization of national resources by the sound operation and functional improvement of the nation's banking and credit system. The Bank has the sole right to issue currency and may issue it in whatever size, design or denomination may be determined by the Monetary Board, subject to the approval of the Government. However, no rules are prescribed in its governing statute about the issuance reserve or the limit of issue because a perfectly managed currency system was adopted.

At the time of the inauguration of business, the Bank of Korea accepted from the Bank of Chosun notes of 100 Won, 10 Won, 5 Won and 1 Won(1 Won = 100 Jeon) plus 50 Jeon, 20 Jeon, 10 Jeon, 5 Jeon and 1 Jeon small notes in addition to petty subsidiary money of the Japanese Government, all of which were regarded as issued by the Bank of Korea according to the Act. For these reasons, currency already issued continued in circulation as legal tender for public and private transactions without restriction.
The new banknotes issued at the time of the third currency reform in 1962 were in six denominations : 1, 5, 10, 50, 100 and 500 Won. They all were printed at the Thomas De La Rue Company in England.

The Bank of Korea subsequently issued new 10 Won notes (series II), on September 21, 1962, and new 100 Won notes (series II) on November 1 that year for the purpose of replacing the imported 10 and 100 Won notes by domestically printed ones. 10 Jeon and 50 Jeon notes were also issued for convenience in the settlement of change in petty transactions.

The intaglio printing method was introduced in 1965 to prevent counterfeiting and improve the quality of banknotes. The third series of 100 Won notes, the first to be domestically manufactured using intaglio printing, were issued by the Bank of Korea on August 14, 1965 and the second series of 500 Won notes on August 16, 1966. Litho-printing was, however, used for the third series of 50 Won notes issued on March 21, 1969.

As the scale of transactions increased and price levels rose in response to the rapid pace of economic development from the middle of the 1960s, the argument for the issue of higher denomination notes became stronger. The denomination of the then highest value notes, 500 Won, was low in comparison with the scale of transactions. This resulted not only in a great demand for cash, whose production cost was high, but also in financial disorder through the widespread appearance of counterfeit cashier's checks, as fixed denomination cashier's checks came to substitute for cash as a means of payment.

Eventually, the Bank of Korea issued 5,000 Won notes (series I) on July 1, 1972 and 10,000 Won notes (series I) on June 12, 1973. Both the 5,000 and 10,000 Won notes were notable for their design and security features. The design of the 5,000 Won notes featured a portrait of the famous Chosun Dynasty scholar Yi I on the obverse and the main office of the Bank of Korea on the reverse. A watermark, security thread, and ultraviolet response fiber were incorporated as important security features. The characteristics of the 10,000 Won notes were the same as those of the 5,000 Won notes except that they bore a portrait of King Sejong the Great on the obverse and one of Kyongbok Palace on the reverse.

Newly-designed 500 Won (Series III) notes were released on September 1, 1973 and, in response to the need for medium denomination notes to meet the increasing size of transaction units resulting from rising incomes and prices, and 1,000 Won notes (Series I) were issued on August 14, 1975. At the outset of the 1980s, the Bank of Korea set about standardizing the currency system to overcome the imperfections of the banknotes and coins which had been issued earlier. The Bank of Korea issued new 1,000 Won notes(Series Ⅱ), revised 5,000 Won notes (Series III) on June 11, 1983, and new 10,000 Won notes (Series III) on October 8 of the same year as part of its policy of rationalizing the currency system. The most important thing about these issues was their adoption of various features such as see-throughs, distinguishing marks for the blind and common machine readable language in preparation for mechanization of cash handling and to guard against the circulation of counterfeit notes. Furthermore, the change of banknote material from waste cotton or pulp to pure cotton made it possible to reduce production costs by extending circulation life.

As the import of color copiers had been derestricted and the risk of counterfeiting had increased, the Bank of Korea issued a new series of 10,000 Won notes incorporating enhanced security features on January 20, 1994. The new series IV 10,000 Won notes had the same design, and prevailing color as the Series III 10,000 Won notes. Additional security features included windowed thread, micro lettering, moir and intaglio latent image.

In a further move to rationalize the currency, the Bank of Korea suspended the issue of Series III 500 Won notes, which were replaced by coins, and of Series I 1,000 Won, Series II 5,000 Won, and Series II 10,000 Won notes on May 12, 1993, all of which had had very limited circulation.
The Bank of Korea issued 1 Won, 5 Won and 10 Won coins on August 16, 1966 to substitute for the 10 Hwan and 50 Hwan coins that had circulated along with the newly-issued banknotes following the third currency reform in 1962 in accordance with the "Law Concerning Temporary Measures for the Circulation of Struck Coins" of August 27, 1962.

On August 26, 1968, as the intrinsic value of the 1 Won brass coins far surpassed their face value, new 1 Won(Series II) aluminum coins were issued to replace them. To facilitate small transactions and reduce currency production costs, new 10 Won(Series II) and 5 Won(Series II) coins were issued on July 16, 1970 ; 100 Won coins on November 30 of the same year ; and 50 Won coins on December 1, 1972.

The Hwan coins were declared no longer legal tender from March 22, 1975 following the abrogation of the "Law Concerning Temporary Measures for Circulation of Struck Coins" in December 1974.

New 500 Won coins were issued from June 12, 1982 to meet the demand for high denomination coins resulting from inflation and the popularization of vending machines. They replaced the 500 Won note, whose production costs had gradually increased. Concerned to keep the currency system in good order, the Bank of Korea eventually set up a standardized coin system by issuing new 100 Won(Series II), 50 Won(Series II), 10 Won(Series III), 5 Won(Series III), and 1 Won(Series III) coins on January 15, 1983.