The total face value of damaged bills and coins discarded by the Bank of Korea reached nearly 4 trillion won ($2.98 billion) last year, marking a sharp rise from previous years as more in-person business transactions occurred with the end of the pandemic, the central bank said Wednesday.
A total of 483.85 million damaged bills and coins were pulled out of circulation by the central bank due to damage in 2023, up 71.17 million from 412.68 million tallied a year earlier.
The face value of the destroyed banknotes added up to 3.88 trillion won, up by more than 1 trillion won from the 2.64 trillion won ($1.97 billion) in 2022.
The number of damaged bills marked a sharp increase of 17.2 percent on-year, much higher than the previous year's 2.3 percent. In 2021, the amount of damaged bills went down by 40 percent as non-cash payments increased amid the COVID-19 pandemic.
The sharp rise in destroyed bills last year came as more banknotes were damaged due to the surge in face-to-face business transactions, following the phase-out of the COVID-19 pandemic. Also, the central bank was able to retrieve more cash as people parked their money at banks for higher interest rates amid the aggressive monetary tightening policy practiced in recent years, the BOK explained.
Another reason suggested by the BOK was that 50,000-won banknotes, the highest denomination here, have neared the end of their life span. According to the BOK's report issued in December 2022, the 50,000-won bill is presumed to have a lifespan of 15 years. As the country began printing the bills in June 2009, the banknotes neared the end of use, the central bank assessed.
The central bank destroyed 427.32 million bills last year, with 10,000-won bills accounting for 55.6 percent, followed by 1,000-won bills at 33.6 percent, 50,000 won bills at 5.8 percent and 5,000 won bills at 4.9 percent.
About 56.53 million coins were destroyed due to damage last year. Of the amount, 100-won coins made up 60 percent while 10-won coins, 500-won coins, and 50-won coins each took up 17.3 percent, 14.8 percent, and 7.9 percent.