You’re standing in a small shop in Pyongyang. You want a bottle of water. You reach for your wallet, but instead of the local paper, you pull out a crisp 10-euro note. The cashier doesn't blink. They take the euro, hand you the water, and give you change in Chinese yuan.
Wait. Where is the currency of North Korea in this transaction?
Honestly, the "official" money of the Democratic People's Republic of Korea (DPRK) is one of the weirdest things about the country. It’s called the North Korean won (KPW), but if you’re a tourist or a high-level trader, you might go weeks without ever touching it.
It’s a "ghost currency" in many ways. It exists, it’s printed, and the government insists it’s the only legal tender, but the reality on the ground in 2026 is a messy, fascinating mix of survival and state control.
The Basics: What is the North Korean Won?
The North Korean won is the official money, issued by the Central Bank of the Democratic People's Republic of Korea. It’s been around since 1947, shortly after the peninsula was split.
Technically, one won is divided into 100 chon. You’ll almost never see a chon coin. In fact, you’ll rarely see any coins at all. Most of the money circulating is paper.
Common Banknotes You’ll See:
- ₩100, ₩200, ₩500 (The "small" change)
- ₩1,000, ₩2,000
- ₩5,000 (The highest denomination)
The ₩5,000 note is a bit of a legend. For years, it featured the face of Kim Il Sung. Then, in 2014, the government suddenly released a new version showing his birthplace at Mangyongdae instead. Why? Some say it was to stop counterfeiters; others think it was part of a larger rebranding of the national identity.
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The Great 2009 Panic (Why No One Trusts the Won)
To understand why the currency of North Korea is so unstable, you have to look back at November 2009.
Imagine waking up and being told your life savings are worth nothing. That’s basically what happened. The government announced a "redenomination," lopping two zeros off the currency. 100 "old" won became 1 "new" won.
But here was the kicker: people were only allowed to exchange a tiny amount of cash—about $40 worth at the time.
If you were a trader who had saved up a suitcase of cash to buy supplies for your market stall, you were wiped out overnight. People were reportedly burning piles of old won in the streets of Hamhung because the paper was more useful as fuel than as money.
The director of the Finance Department, Pak Nam-gi, was eventually blamed for the disaster and executed. Since then, the North Korean people have had a very healthy—and justified—distrust of their own money.
The "Real" Exchange Rate vs. The Official Rate
If you look up the KPW on a standard currency converter today, you might see a rate of roughly ₩900 to $1 USD.
That rate is a total fantasy.
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It’s the "official" rate the government uses for state-run accounting. If you actually try to buy something in a private market (a jangmadang), the black market rate is usually closer to ₩8,000 or ₩9,000 per dollar.
The gap between these two numbers is where the real North Korean economy lives. It’s a "blocked currency," meaning it isn’t traded on global markets. You can’t go to a bank in London or New York and ask for North Korean won. They’ll laugh at you. Or just look confused.
A Country of Three Currencies
Because the currency of North Korea is so volatile, the country has become "dollarized"—or more accurately, "yuan-ized."
In the northern regions near the border with China, the Chinese yuan (RMB) is king. If you’re buying a television or a bag of rice, you pay in yuan. It holds its value. It’s easy to hide.
In Pyongyang, you’ll see a mix:
- Chinese Yuan: Used for almost everything in the markets.
- US Dollars: Preferred for high-end electronics, cars, or real estate (yes, an informal housing market exists).
- The Won: Used for small things—bus fares, government-subsidized rations, or as change when the shop runs out of foreign coins.
The government has tried to crack down on this. They’ve banned foreign currency, then un-banned it, then "encouraged" people to put their foreign cash into bank accounts. Nothing really works because the people know that once their dollars are in a state bank, they might never see them again.
Can Tourists Use the Won?
If you visit North Korea, the rules are pretty strict. You aren't actually supposed to use the local won.
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Tourists are expected to pay in Euros, US Dollars, or Chinese Yuan. You’ll usually be quoted prices in Euros. If you buy a souvenir for 3 Euros and pay with a 5 Euro note, you might get your change in a mix of Yuan and maybe some very crisp, uncirculated North Korean won notes that are meant to stay in your pocket as "souvenirs."
Technically, it is illegal to take the currency of North Korea out of the country. Do people do it? All the time. But if a customs officer finds a stack of won in your luggage, they might confiscate it. It’s a weird legal gray area that most tour guides will warn you about.
Digital Money in a Hermit Kingdom?
It sounds like a contradiction, but North Korea is trying to go digital. They have a debit card system called Narae.
You load it with foreign currency (usually USD or Euro), and it converts it to an internal electronic currency at the "real" market rate. It’s a way for the government to capture that sweet, sweet foreign cash while giving the people a way to pay for things at grocery stores without carrying a brick of paper won.
In 2026, we're seeing more of this. The government is pushing for "cashless" transactions in Pyongyang to try and regain some control over the money supply. Whether the average person in the countryside trusts a piece of plastic more than a hidden stash of yuan is another story entirely.
Actionable Insights for the Curious
- Don't trust the official rates: If you see a news report saying the North Korean won is "strengthening," check the black market data (often reported by outlets like Daily NK). That’s where the truth is.
- Currency as a political tool: In North Korea, money isn't just for buying things; it’s a tool for state surveillance. Every time the government forces a currency exchange, they are essentially doing a "census" of who has wealth.
- Collect with caution: If you managed to get some KPW notes from a specialized dealer or a past trip, keep them away from direct sunlight. The paper quality isn't the best, and they fade faster than most Western notes.
The story of North Korea’s money is the story of its people—resourceful, cautious, and always keeping a backup plan in a more stable foreign currency.
Next Steps for You: If you’re interested in the economic side of things, look into how the Donju (the "money masters") use foreign currency to fund construction projects in Pyongyang. It’s the hidden engine of the North Korean economy.