The won (원, ; symbol: ₩; code: KPW) or Korean People's won is the official currency of North Korea. It is subdivided into 100 chon. The won is issued by the Central Bank of the Democratic People's Republic of Korea, based in the capital city, Pyongyang.
Won is a cognate of the Chinese yuan and Japanese yen. All three names derive from the Hanja 圓(원), which means "round shape." The won is subdivided into 100 chon (전; 錢; McCune-Reischauer: chŏn; Revised Romanization: jeon).
The won became the currency of North Korea on December 6, 1947, replacing the Korean yen that was still in circulation.
North Korean won are intended exclusively for North Korean citizens, and the Bank of Trade (무역은행) issued a separate currency (or foreign exchange certificates) for visitors, like many other socialist states. However, North Korea made two varieties of foreign exchange certificates, one for visitors from "socialist countries" which were colored red and hence nicknamed "red won", and the other for visitors from "capitalist countries" which were colored blue/green and hence known as "blue won". FECs were used until 1999, then officially abolished in 2002, in favor of visitors paying directly with hard currencies. Since at least 2012 foreign visitors (and privileged locals) can buy goods priced in 'tied' won using a local debit card, which they have to credit with exchanging foreign currency (Euro, United States dollar or Renminbi/Yuan) at the official bank rate. One euro would provide a credit of 130 won. This card can be used for instance at the famous Pyongyang Department Store No. 1 or at the different stores at the international hotels, where the goods are priced at the tied won rate. This tied won does not exist in the form of bank notes. In normal stores and markets goods are priced in what has been called the 'untied' won or free market rate and regular banknotes can be used here. At for instance the Tongil Market and the Kwangbok Department Store (a.k.a. the Chinese Market) there are semi-official exchange agents who will give in regular banknotes around 10,000 won for one euro (2012) to locals and foreign visitors alike, so almost 77 times as much as the tied rate. However, the prices in the normal shops outside the tied won and restricted state shops are also based on this untied won rate.
Since 2001, the North Korean government has abandoned the iconic rate of 2.16 won to the dollar (which is said to have been based upon Kim Jong-il's birthday, February 16) and banks in the country now issue at rates closer to the black market rate. More recent official rates have shown the North Korean won to be ₩129.559 to the US dollar. However, rampant inflation has been eroding the North Korean won value. A report by defectors from North Korea claimed that the black market rate was ₩570 to the Chinese yuan (or about ₩4,000 per U.S. dollar) in June 2009. As of December 6, 2018, xe.com, a website that publishes mid-market currency exchange rates, lists the exchange rate at ₩900.073 to US$1.00.
The won was revalued in November 2009 for the first time in 50 years. North Koreans were given seven days to exchange a maximum of ₩100,000 (worth approximately US$40 on the black market) in ₩1,000 notes for ₩10 notes, but after protests by some of the populace, the limit was raised to ₩150,000 in cash and ₩300,000 in bank savings. The official exchange rate at this time was around $740 but black market value of the ₩150,000 was estimated to be near $30. The revaluation, seen as a move against private market activity, wiped out many North Koreans' savings. The Times speculated that the move may have been an attempt by the North Korean government to control price inflation and destroy the fortunes of local black market money traders. The announcement was made to foreign embassies but not in North Korean state media. Information was later carried via a wire-based radio service only available within North Korea.
As part of the process, the old notes ceased to be legal tender on November 30, 2009, with notes valued in the new won not being distributed until December 7, 2009. This meant that North Koreans would not be able to exchange any money for goods or services until that date and most shops, restaurants and transport services had been shut down for the week. The only services that remained open were those catering to the political elite and foreigners which continued to trade exclusively in foreign currency. The measure had led to concerns amongst North Korean officials that it would result in civil unrest. China's Xinhua news agency described North Korean citizens in a "collective panic"; army bases were put on standby and there were unconfirmed reports of public protests in the streets in a handful of North Korean cities and towns that forced authorities to slightly increase the amount of currency people would be allowed to exchange. Piles of old bills were also set on fire in separate locations across the country, old paper notes were dumped in a stream (against laws of the desecration of images of Kim Il-sung) and two black market traders were shot dead in the streets of Pyongsong by local police, according to international reports. Authorities threatened "merciless punishment" for any person who violated the rules of the currency change.
Pictures of the new notes were published on December 4, 2009, in the Chosun Shinbo, a North Korean newspaper based in Japan. The paper claimed that the measure would weaken the free market and strengthen the country's socialist system. However, the won plummeted 96 percent against the U.S. dollar in the ensuing days after revaluation. Authorities eventually raised the limit to 500,000 won, Chosun said, and promised no probe into savings of up to one million won and unlimited withdrawals if savings of more than one million are properly explained.
In February 2010, some of the curbs on the free market were eased and a senior party official sacked after incidents of unrest. Pak Nam-gi, the director of the Planning and Finance Department of North Korea's ruling Workers' Party, was executed later in 2010. North Korea denied any serious crisis relating to the revaluation.