The currency is issued by the Central Bank of the Democratic People's Republic of Korea, based in the North Korean capital city of Pyongyang.

Won, like Japanese yen, is borrowed from Chinese yuan, written Hanja 圓 (원), which means "round shape".

From 1978 on, the North Korean government maintained an iconic rate of 2.16 won to the US dollar (which is said to have been based upon Kim Jong Il's birthday, 16 February).

[4] Over the decades, however, rampant inflation eroded the currency's value, and from 2001 the government abandoned the rate in favor of those closer to the black market's.

A report by defectors from North Korea claimed the black market rate was ₩570 to the Chinese yuan (about ₩4,000 per U.S. dollar) in June 2009.

[10] 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.

China's Xinhua news agency described North Korean citizens as being in a "collective panic";[13] army bases were put on alert and there were unconfirmed reports of public protests in the streets in a handful of North Korean cities and towns, forcing authorities to slightly increase the amount of currency people were allowed to exchange.

[14] 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.

[17] Pictures of the new notes were published on 4 December 2009 in the Chosun Shinbo, a North Korean newspaper based in Japan.

In February 2010, some of the curbs on the free market were eased, and a senior party official was sacked after incidents of unrest.

[22] Pak Nam-gi, the director of the Planning and Finance Department of North Korea's ruling Workers' Party, was executed later in 2010.

Following other socialist economies like Cuba and China, North Korea developed a special system of marking coins for two groups of foreign visitors.

A fourth set, intended for collectors rather than circulation, was struck with the word "specimen" or "example" in Korean characters in the areas where the stars would be.

These notes were much larger than the previous issue and depicted images representing various industries in the North Korean economy.

The designs for this issue were much more symbolic and charismatic than previous ones, with Kim Il Sung featuring for the first time on the 100 won note.

In 2007, a commemorative version of this banknote series was released, stamped "Great Leader Comrade Kim Il Sung's 95th Birthday" on all denominations.

Banknotes in circulation for the second won, up to December 2009, were as follows: In 2009, another currency reform [ko] was initiated to tackle hyperinflation and black market activities.

Like the coins for this series, some of the denominations were initially printed in 2002 but were never released into circulation, pointing to a planned monetary revaluation much earlier than 2009 that was never carried out.

There are rumors that the original designs for the 1,000 and 2,000 won notes depicted Kim Il Sung and had similar design features to the 5,000 won that were scrapped and destroyed due to counterfeiters or thieves breaking into a bank warehouse and stealing early notes or printing materials, resulting in a total redesign of the two denominations in question.

Instead of depicting the portrait of North Korea's founder Kim Il Sung, the note depicts an image of his birthplace in Mangyondae and on the back the International Friendship Exhibition in Myohyangsan that displays gifts he and his son Kim Jong Il received from foreign leaders.

[51] For the 1978 banknote series, foreign certificates, called "Pakkundon", meaning "exchangeable money" were implemented by an overstamp and serial number color.

These were issued in all denominations, except for the ₩100 note, presumably because it was assumed by the government that foreign visitors to North Korea would not show proper respect for its depiction of Kim Il Sung.

These notes were discontinued in 1988 and replaced with a new series of Pakkundon in all banknote form that was more distinguishable and unmistakable from generic circulation currency.

[55] As of 2018, it had evolved to most North Korean stores accepting U.S. dollars, euros and Chinese yuan/renminbi, with change from transactions primarily returned in renminbi or U.S.

This tied won does not exist in the form of bank notes, and is effectively a separate currency and accounting unit for sales involving foreign exchange.

the Chinese Market) there are semi-official exchange agents who will give in regular banknotes around 8,000 KPW/USD or 10,000 KPW/EUR to locals and foreign visitors alike (as of 2012, or 77 times the tied or official rate).