Yoon Ja-young is in charge of articles translated by a generative AI system and edited by The Korea Times. She is interested in improving the newspaper through AI.
50,000 won bills disappearing
50,000 won note
By Yoon Ja-young
By Yoon Ja-young
Only four out of 10 50,000 won notes issued by the Bank of Korea are returning to the central bank, adding to suspicion that they may be entering the underground economy.
According to the bank, some 18.5 trillion won of 50,000 won notes were issued this year, as of November. But only 7.5 trillion won of the bills were collected by the bank, a rate of 40.6 percent.
It contrasts with the high collection rate of 10,000 won notes -- over 90 percent return to the bank.
The BOK has issued a total of 110.5 trillion won of 50,000 won bills since May 2009. Only 47.4 trillion won of the notes have been collected during the period. It means each Korean should have on average 25 50,000 won notes.
Market watchers say the disappearing 50,000 won bills may be entering the underground economy.
“The low collection rate of bills means cash is remaining somewhere, such as wallets or safes, derailing the cycle of money circulation where money should return to the central bank,” said Cho Young-moo, a researcher at the LG Economic Research Institute.
“When considering that the whereabouts of cash is hard to track, the disappearance of 50,000 won bills means that there is increasing demand by people who want to evade the tax agency and keep the money to themselves, or transfer the wealth.”
He said surging sales of gold bars and personal safes also back up the hypothesis. “It should be noted that the country’s underground economy has got larger since the latter half of 2009 when the 50,000 won bills debuted,” he said.
The National Tax Service (NTS) also believes that many of the 50,000 won bills that have disappeared are connected to tax evasion. For instance, the NTS reported that its agents found 50,000 won bills and $100 notes, worth 600 million won in total, hidden in a black suitcase when they raided the luxury country residence of a tax evader. They also found 200 million won of 50,000 won bills in the safe of a golf club owner who was trying to evade taxes.