2 Xu – North Vietnam

By 1958, the currency situation in the Democratic Republic of Vietnam (North Vietnam) was characterized by a period of stabilization and state consolidation following the disruptive First Indochina War. The government, led by Ho Chi Minh, had successfully introduced the North Vietnamese đồng (VND) in 1946 to replace the French Indochinese piastre in its territory. However, the war against the French, which ended in 1954, caused significant inflation and monetary fragmentation. The immediate post-Geneva Accord years (1955-1957) were therefore dedicated to monetary reform, with the state working to establish the đồng as a stable, unified currency and to curb the black-market circulation of old piastres and gold.

This stabilization effort was a cornerstone of North Vietnam's First Three-Year Plan (1958-1960), which aimed to build a socialist economy through agricultural collectivization and initial industrialization. A reliable currency was essential for state planning, budget control, and the distribution of resources. The government implemented measures to centralize banking under the National Bank of Vietnam, control prices, and restrict the hoarding of precious metals. The goal was to sever the population's reliance on commodity money and ensure all economic transactions flowed through the state-controlled monetary system.

Consequently, the currency situation in 1958 reflected a transitional but deliberate move from post-war recovery to a commanded socialist economy. While the đồng was not fully convertible and the economy remained underdeveloped, the state had largely succeeded in establishing its monetary authority. The focus was on using currency as a tool for internal planning and resource mobilization, deliberately isolating its financial system from the South and the broader non-communist world, setting the stage for the economic policies that would continue through the escalating conflict of the coming years.