Korean currency
Korean currency dates back as far as the Goryeo dynasty when the first coins were minted. The coins, cast in both bronze and iron, were called tongbo and jungbo. Additionally, silver vases called ŭnbyŏng were widely used and circulated as a currency among the aristocracy of Goryeo.
It was not until the beginning of the Joseon period that copper coins called mun were minted for wide circulation. Jeohwa, which was made of standardized mulberry-bark paper early in the Joseon period, became the first legal paper money and was used as a medium of exchange in place of coins until it disappeared in the early 16th century. From the 17th century until the end of the 19th century, coins denominated in mun bearing the inscription Sang Pyeong Tong Bo were the most widely circulated currency.
History
The history of Korean currency dates back to around the 3rd century BC, when first coins in the form of knife coins, also known in Korean literature as "Myeongdojun" originally belonging to the Chinese state of Yan but also was used in trade with Korean state Gojoseon; which were said to have been circulated. Grain coins were put to use within the kingdoms for a long period of time.While various items like clam shells, iron, and precious metals were also traded as a medium of exchange in Ancient Korea, the primary forms of currency during this era used in bartering were mainly grain and cloth. During the pre-monetary times, anything related to food and clothing was used as a medium of exchange as well as a method to measure the value of products. The types of grains most commonly used for bartering were rice, barley, beans, and millet. Of these commodities, millet white rice was valued a lot more than regular rice. The most common forms of cloth as currency in ancient Korea were hemp, ramie, and silk. Other goods were calculated as having a certain value that was in relation to fundamental commodities such as grain, rice, and cloth. As a result of the ancient barter-based economy some modern elderly South Koreans still use the phrase "Go to the market and sell some rice" which evokes the idea of trading rice for other products. It would not be until the 17th century that coinage fully replaced the barter system throughout the entire Korean peninsula.
Hemp was first the most common form of cloth currency but later cotton cloth would become the dominant form of cloth money. Since the Three Kingdoms period, silk was considered to be one of the most highly valued medium of exchange.
As in modern times Xin dynasty era hwacheon cash have been unearthed in tombs in modern Korea there is minor evidence that these coins might've been used for the international trade of the time. In 2018 Wu Zhu cash coins, known as oshujeon in Korea, were unearthed in the North Gyeongsang province further confirming an ancient trade relation with China.
The first known metallic coinage known to have circulated in ancient Korea was Chinese knife money, this type of Chinese coin circulated in the Kingdom of Yan during the Warring States period, and was brought to the Korean peninsula by Chinese settlers and in modern times specimens of knife money have been excavated in the provinces of Pyeongan and Jeolla. During the Chinese Han dynasty Wu Zhu cash coins which were known as oshujeon in Korean were brought to the Korean peninsula following the Han conquest of Gojoseon in 108 BC. The oshujeon would continue to circulate in the later kingdoms of Goguryeo and Silla of the Korea Three Kingdoms period up to the 10th century CE. Today oshujeon are most commonly found in the tombs of the former Lelang Commandery.
The kingdom of Goryeo issued its own version of grain coins until 1097. The first iron and bronze coins minted in Korea occurred during the 15th year of the reign of King Seonjeong. During the reign of King Sukjong, a monetary system of casting a variety of coins was established in the years 1097–1107. These coins included the 東國, 海東 and 三韓 series of coins. Coins made from metals other than iron like copper and bronze were issued in the 10th and 11th centuries, but their circulation was limited. Silver vases called ŭnbyŏng were widely used and circulated among the aristocracy of Goryeo.
In 1392, the Goryeo kingdom was overthrown and the state of Joseon dynasty was founded. The founder of the dynasty, Taejong made several attempts to bring about improvements in the prevailing monetary system but they were not a success initially. The attempts include issuing Korean paper currency and issuing coins instead of importing them from China. The coins issued in Korean being unsuccessful led to the issuance of a standardized note made of black mulberry bark called Jeohwa, that was used in place of coins. Bronze coins were not cast again until the year 1423 during the reign of King Sejong. These coins had the inscription 朝鮮通寶. The coins that were minted in the 17th century came out to be a success at last and as a result, 24 mints were established throughout Korea. Coinage formed a major part of the exchange system after this time. In 1633, "mun" was made the main currency of Korea and copper and bronze coins were issued denominated in this currency unit. It prevailed till 1892 when "yang" took over as the main currency. Yang was the first currency that used a decimal system as it was divided into 100 equal fun, though it did not last long.
Won was introduced in 1902 as the official currency unit replacing yang at 1 won = 5 yang. The Bank of Korea was established in 1909 but soon after in 1910 Imperial Japan annexed the Korean Empire. Under Colonial rule, the country was made to use the currency unit "yen" in place of the Korean Won, which took over the Korean won at par. After the division of Korea, the state of South Korea was established and recognized in 1948, and won was again made the official currency of the new state. "jeon" was made the subunit of the currency that divided it into 100 equal parts. Bank of Joseon issued the currency for independent South Korea for the first time, that too in banknotes only.
The country then had to switch over to a new currency unit named "hwan" replacing won at 1 hwan = 100 won. Like South Korean won, this currency unit was also issued in banknotes initially but in 1959, coins denominated in hwan were also issued and were the first circulating coins in South Korea. Hwan had a peg with the US dollar but with time it also got devaluated. This was the reason for the reintroduction of won in 1962 as the official currency unit. South Korean currency was still pegged to the US dollar until in 1997 when it was floated into the world market.
Ŭnbyŏng (1101~1331)
The ŭnbyŏng, or hwalgu, were silver vases that were shaped like the Korean peninsula and were widely used during the Goryeo period, they primarily circulated among the aristocracy. These ŭnbyŏng were produced from the year 1101 and were engraved with an official state seal to mark them as a legitimate currency which was valid throughout Goryeo. The ŭnbyŏng weighed around one Kŭn which is roughly equal to 600 grams, this made them very useful for paying for large transactions. Historians suggest that the ŭnbyŏng were primarily used by the aristocratic classes and were also often involved in the bribing of government officials. In the year 1282 the government enacted a law that pegged the value of one ŭnbyŏng at between 2,700 and 3,400 litres of rice. But regardless of the fact that this currency was highly impractical for paying for low value items, the ŭnbyŏng would continue to be used during the next two centuries.During the reign of Chungnyeol of Goryeo the government had permitted the circulation of rough or broken pieces of silver. By the year 1331 the ŭnbyŏng had completely disappeared from circulation. No specimens of the ŭnbyŏng are known to have survived to the modern era.
Arrow coins (1464)
In the year 1464, King Sejo had introduced a new form of currency known as the "arrow coin". This currency was shaped like an arrowhead which allowed it to be used as a medium of exchange during times of peace and as a weapon when the country was fighting another war.The royal instructions regarding the "arrow coin" and how it should be circulated can be translated as the following excerpt:
The blade of the "arrow coin" resembled a leaf of a willow tree and its stem was inscribed with the text P'albang T'onghwa this text indicated that the "arrow coin" was legal tender throughout Korea.
The arrowhead had a length of 55 millimeters long and its stem was an additional 52 millimeters making the "arrow coin" 107 millimeters long. 1 "arrow coin" was nominally worth 4 pieces of Joseon era paper money.
The new currency did not receive the support of the Korean people causing the failure of yet another attempt to establish a money-based economy in Korea to fail. No surviving specimens of the Korean "arrow coin" have ever been discovered.
Mun (1633–1892)
The Joseon Dynasty issued its first copper coins.Yang (1892–1902)
In 1888, shortly before the yang was introduced, a small number of coins denominated in hwan and mun were minted. Even though the yang had been used in the past it was reintroduced as the main currency in 1892. One yang was subdivided into 100 fun, making it the first Korean decimal currency.The mintage and circulation of modern currency began during the last years of the old Korean Empire as a result of contact with the West. Around the time of the trial adoption of the gold standard in 1901, gold and silver coins were in circulation along with some Japanese banknotes.