The South Korean Won and the Japanese Yen are one example of currencies with extremely large denominations. A single unit of both currencies has been worth less than 1 US cent for a couple of decades and most people therefore receive salaries in the millions.

So why won't these governments proceed to redenomination? Why would any country want to use notes denominated in the tens of thousands to buy bread?

  • 13
    Counter-question: Why would they?
    – Philipp
    Aug 19, 2017 at 12:55
  • 6
    @JonathanReez Because it costs money and is a significant inconvenience to the citizens. Also, if we take the Yen, 1 Yen is about 1 penny, so its really not that bad. Aug 20, 2017 at 3:20
  • 4
    Why would the US not multiply by 100 to get rid of the fractional part? Aug 20, 2017 at 6:12
  • 3
    This question would probably get better responses on Economics Stack Exchange
    – Charlie
    Aug 20, 2017 at 14:04
  • 2
    I am living in South Korea and though most prices are a multiple of 10 or 100 wons, having prices using the last digit are not uncommon. No one really cares, as most payments are made by bank cards anyway (with the country planning to be coinless by 2020)
    – Taladris
    Aug 22, 2017 at 8:30

3 Answers 3


I don't know if this has any influence on Korea or Japan's decisions, but here were some "bad experiences" with lopping zeros in Asia; the downfall of the Sukarno regime in Indonesia was closely related to such a decision:

Redenomination was seen as a quick remedy, just as it had been when Germany brought hyperinflation under control after World War I. For Sukarno, however, it proved catastrophic.

"Markets in Jakarta were thrown into bewilderment and became almost panic-stricken," The Nikkei reported on Dec. 15.

Over the next 10 days, the paper reported that prices were rising 10% to 30% in Jakarta, and that army vans were driving around with megaphones calling for people to remain composed and stressing that old bank notes remained valid.

Redenomination merely fueled inflation as stores took to price gouging and stockpiling merchandise. The government threatened merchants accused of such practices with harsh punishments, including the death penalty.

But the price hikes were not simply a case of profiteering. Store owners were forced to raise prices because the government had introduced a "revolution donation" program with the purpose of collecting 10% of the face value of the new rupiah when converted.

The ensuing chaos resulted in the collapse of the Sukarno regime.

Today, however, bureaucrats and senior central bank officials stress that the stability of Indonesia's macroeconomy would insulate the country from a similar reaction.

This was, of course, not a mere redenomination but combined with a wealth tax on cash as well. Some of the communist regimes in Eastern Europe did something similar in the aftermath of WWII, e.g. imposing cash exchange limits for the new currency as a way to confiscate wealth from "exploitative class".

Sinister connotations aside, there's the obvious cost of such a move. Japan apparently considered it in 2001:

A currency re-alignment would generate a significant amount of work in order to adapt the nation's computer and administrative systems. [...]

But there could also be harmful side-affects, such as opportunistic price rises during the conversion period.

I'm not sure what if any official explanation was provided for dropping the plan.

One 2019 article proposing this idea again does point out that

Japan is exceptional among the major advanced nations in having such a low-valued currency unit. Japan may have the second-biggest economy in the OECD, but its currency unit is near the bottom of the list, at number 17 out of 20. Within the Group of Seven, meanwhile, Japan places last in terms of currency unit value.

But it doesn't mention anything about the failure of the previous attempt.

And one Reuters article made fun of Japan's "quadrillion feat" regarding their national debt.

There are some interesting research papers on the topic as well, e.g. trying to determine the conditions in which the rebasing is likely to occur:

This paper investigates the conditions under which developing and transition nations engage in currency redenomination. Given that many governments of developing countries experience high levels of inflation and deterioration in their currencyís value against other currencies, why do some elect to redenominate, while others do not? And why do some governments wait many years after a bout of hyperinflation, or after their currency is priced at 1000 or 5000 units to the dollar, to redenominate, while others do so relatively quickly? I suggest that the explanations rest in a combination of economic and political factors, including inflation, government's concerns about credibility, and the effect of currencies on national identity. I employ survival analysis to test these expectations, using a set of data for developing and transition nations, covering the 1960-2003 period. I find, not surprisingly, that inflation is an important predictor of redenomination. Redenomination also is related to political variables, including government's time horizons, the governing partyís ideology, the fractionalization of the government and legislature, and the degree of social heterogeneity.

Apparently low inflation (such as Korea or Japan experience nowadays) is less inductive to a rebasing, but there are other factors as well.

For instance, in January 2005, Turkey replaced its currency (the Lira) with the "New Turkish Lira" (YTL), with a conversion rate of one million old lira to one new lira. And in July, Romania introduced a new "heavy" version of its currency, the leu, with four fewer zeros. In both cases, governments noted that redenomination would send a signal to citizens, as well as to the international community, that economic policy mistakes were in the past. [...] Currency redenomination, then, may come as part of a broad package of economic and political reforms, as was the case in Afghanistan in October 2002; following years of decline in the currency's value, a new afghani was introduced, with three zeros removed. This introduction was meant to herald, along with a series of other measures, the emergence of Afghanistan from years of civil conflict, and its movement toward modern nationhood.

So there is apparently a political message that is intended to be conveyed as well by such rebasings. I guess there was a lack of desire in this respect in Korea or Japan, especially in the latter, which had more stable politics.


While the U.S. has the dollar as it usual currency unit, dollar amounts are often reported to the cent (after which rounding is usual) and the penny is the smallest indivisible unit. So, the Yen and Won are effectively just quoting prices in pennies which are their smallest indivisible unit, rather than centipennies.

Who is to say that the U.S. approach which requires decimal math not needed in Japan and Korea is better when a significant minority of the population that uses it (including young children who still use cash for small purchases) has trouble doing math with decimals?

All things being equal, the burden is on those seeking to change the status quo to find a compelling reason for it as it would require legislation and considerable expense as everything that deals with cash from vending machines to prices in catalogs to economic statistics to bank accounts to engraving and printing and mint designs of currency to change to symbols that distinguish the old and the new, to computer programs.

The bigger problem is in countries that have experienced hyperinflation, causing many, many zeros to accumulate and the smallest indivisible unit to be hopelessly small. Brazil is a recent example. The earliest well known example was the Weimar Republic in Germany. Venezuela is arguably the most recent example. In these cases that status quo is so bad that the considerable expense of changing currencies is worth it.

In those places, the interest in preserving the status quo has vanished because hyperinflation has caused a total collapse in confidence in a fiat currency which is deadly to the entire monetary system in the economy. Typically, in those case, the new currency doesn't just lop off zeros, but also contains some sort of policy changes that give people reason to trust that the new currency will be comparatively stable in value and worth using in lieu of barter, such as pegging the new currency to a more stable currency or to a commodity like gold or silver.

Lopping off zeros from a hyperinflated currency is usually futile and needs to be repeated every few months or every couple of years until hyperinflation ends, and while the first redenomination can excite hope, multiple redenominations in short order undermine confidence and invite cynicism and a shift to alternative outside currencies for important commercial matters. Every significant redenomination, almost by definition is politically painful for the administration that caused the inflation to happen, because it is a very public and pervasive admission of failure with respect to one of the core functions of government.

It isn't uncommon in places where there is currency instability for foreign currencies such as U.S. dollars, Euros, or Swiss Francs, or French Francs to end up becoming the de facto currency in the interim, also undermining the status quo reliance on the hyperinflated currency. Indeed it is for this reason that most of the $100 U.S. bills in circulation in the world are in circulation outside the U.S., although the Euro has made inroads as a backup currency in places with a failing domestic currency system.

In some places, like Poland, where there is a lack of confidence among commercial bankers in the local currency, transactions such as mortgages are often denominated in Swiss Francs rather than the Polish currency. Similarly, international oil transactions are usually denominated in U.S. dollars, or Euros or British pounds, rather than in the local currencies of the oil producing countries, so that hyperinflation risks in countries where currency managers have not developed credibility are mitigated.


Redenominating means, either relabelling all new coins and notes to their new values and undergoing a period of confusion where an old $50 is now worth $5 (or whatever) or keeping hard currency at its present value and just changing electronic money. The former is a nuisance, the latter is unfair (as Italians discovered).

Also, all the practical benefits can be met by abolishing small old coins and rounding prices (which plenty of countries have done) and perhaps encouraging a new name to emerge for larger units.

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