5 Chon – Korean Empire

By 1909, the currency situation in the Korean Empire was one of profound instability and foreign domination, marking the final stage of its financial sovereignty. The national currency, the yang, had been severely debased and discredited due to years of excessive printing by the government to cover fiscal shortfalls, leading to rampant inflation and a loss of public trust. This monetary chaos was systematically exploited by Japan, which, following the 1905 Protectorate Treaty, was tightening its control over all Korean institutions, including finance.

The key feature of the period was the forced dual-currency system, where the Japanese yen circulated alongside the deprecated yang. The Japanese-controlled Bank of Korea (established in 1909, replacing the earlier Korean Central Bank) was the central financial instrument, issuing banknotes backed by Japanese capital and gradually pushing the yang out of circulation. This process was not economic but political, designed to bind the Korean economy inextricably to Japan's and facilitate colonial administration, which would be formally annexed just a year later in 1910.

Thus, the currency situation in 1909 was less an independent monetary policy and more a reflection of a dying empire's subjugation. The collapse of the yang and its replacement by the yen symbolized the effective end of Korean economic autonomy. The financial disarray provided Japan with a pretext for further intervention, finalizing a process where control over money became the mechanism for complete political control, paving the way for the full colonization of the peninsula.