Top Secret Documents on North Korea's 'Tongpyo’: Regime Admits to Suspending the Issuance of Banknotes Due to Financial Woes - ISHIMARU Jiro　　　

We obtained a "top secret" North Korean document.

The document, issued by the Workers' Party of Korea in early October 2021, describes how the Kim Jong-un regime suffered from financial difficulties and was forced to issue temporary money coupons called "Tonpyo" instead of proper banknotes.

On the other hand, the document also described the confusion that arose when residents refused to accept "Tonpyo" at stores and markets out of distrust or sold them on at a discount.

◆What is "Tonpyo", the temporary money coupon?

"Tonpyo" are temporary money coupons issued by the Central Bank of Korea. Their face value is 5,000 won, which is the same as the highest amount of regular banknotes. This was revealed in early September when South Korean media reported a photo of a Tongpyo. The coupon in the photo is believed to have been issued between August and early September.
※ 5,000 North Korean won is about 0.60 USD as of November 12.

However, as soon as "Tonpyo" were issued, they were immediately discredited by local residents. Several reporting partners who live in the northern region reported the following in late October.

"The government's actual money is unreliable, so who would believe in 'Tonpyo'? Businessmen are trying to avoid accepting it if possible." (North Hamkyung Province)

"People are laughing at Tonpyo. So, money changers buy 5,000-won tickets at a discount of about 4,000 won in cash. They bring the tickets to companies and institutions that still have cash and use their connections to exchange them for cash and make a profit. Since the issuance of 'Tonpyo' and the realization that there is no money left in the country, more and more people think that they must have RMB or US dollars no matter what." (Rangang Province)

◆Regime admits "Financial Crisis" caused by coronavirus

The internal document we have obtained starts with the following explanation.

"Once we receive the political project document 'On having a correct understanding of the national measure of issuing the Central Bank "Tonpyo" and ensuring that no distortions appear in the circulation process' to thoroughly enforce the ratification task given by Comrade Kim Jong-un on September 24, 2021, we must immediately disseminate it among cadres, workers and residents in every possible way."

The document was created by the Propaganda and Agitation Department of the Workers' Party. Based on Kim Jong-un's instructions, the Department of Propaganda and Agitation orders the party to firmly control cadres, workers and residents regarding the problems arising from the circulation of the "Tonpyo."

Why did the North Korean authorities decide to issue the temporary money coupon "Tonpyo" in the first place?　And what kind of problems have arisen?

"Recently, the country has been issuing 5,000-won "Tonpyo" from the central bank and disbursing them through various spaces, including funds related to production and management activities of institutions, factories, and enterprises, living expenses (i.e., salaries) of executives and employees, savings of residents, and money on bank cards."

This is how the internal documents are written. In other words, to inject funds into the party, administration, public security and other institutions and state-run enterprises and also keep money in circulation in financial institutions, the government issued "Tonpyo" instead of cash.

The following is the given explanation behind the issuance of the "Tonpyo."

“As the global health crisis has been prolonged, the nation has been unable to meet the demand for cash necessary for production and management activities of factories and business establishments in an amicable manner, and projects for economic construction and the improvement of people's lives have been hindered. Therefore, the government has taken measures to issue a 5,000-won Central Bank "Tonpyo" to proactively overcome the temporary difficulties in the circulation of money.”

The "health crisis" refers to the pandemic caused by the coronavirus. Since the end of January last year, the North Korean government has closed its border with China to block the influx of the virus, drastically reducing trade, and tightly controling the movement of people and distribution of goods within the country. The document acknowledges that the side effects of this action have led to a financial crisis.

However, if the government "could not meet the necessary cash demand equitably," why did they issue temporary money coupons instead of additional cash?　If the government feared that printing bills would cause inflation, printing "Tonpyo" would have surely raised the same concerns.

◆Inability to Import Paper and Ink Makes it Impossible to Print Banknotes.

The reason why the Kim Jong-un regime has been unable to issue regular banknotes is most likely because it has failed to import paper and ink from China. In mid-October, our reporting partner in Ryanggang Province said, "I was told by an official that paper and ink had stopped coming in from China and that they were temporarily printing bills using domestic products."

"The authorities say that "Tonpyo" is 100% domestically produced, but the quality is poor, and it looks like ordinary paper," said another reporting partner. In addition, the paper and ink used for printing banknotes must have run out due to the difficulty of imports from China.

South Korea's National Intelligence Service reported to the National Assembly's Intelligence Committee on October 28 that the reason for the issuance of "Tonpyo" was "the interruption of imports of banknote paper and special ink." Indeed, looking at the monthly trade statistics released by the General Administration of Customs of the People's Republic of China, there is no record of North Korea importing paper from China since April of this year.

In the internal documents we obtained, there is no mention of the purpose of issuing "Tonpyo" to encourage residents to exchange their foreign currency holdings or for supporting the impoverished.

◆Distrustful Residents Refuse to Accept the "Tonpyo"

What kind of disturbances are appearing due to the circulation of "Tonpyo"?

The document states that "Tonpyo" have the same value as national cash and can function as a payment method. However, a reporting partner in North Hamkyung Province expressed his opposition: "Who will believe the government when they say it is the same as regular money? We have been deceived so many times in the past. We'd rather barter."

The internal document points out the emerging trend among residents to refuse to accept "Tonpyo", saying,

"Right now, there is a bias in the distribution process of the central bank’s "Tonpyo." Some institutions, markets, and residents refuse to accept the Central Bank’s "Tonpyo", claiming that they would be in trouble if the Central Bank does not exchange them for cash later and that the quality of the "Tonpyo" is inferior to 5,000 won bills."

They admit that there is a refusal to accept the money coupons, which is critical to their circulation.

◆Rampant Rumors

“What is more serious is that servants and salesmen are trying to get 5,000 won "Tonpyo" discounted to 4,000 or 3,800 won in some outdoor stalls and markets.”
It has only been a while since "Tonpyo" was first issued, but they are already starting to get "discounts." In addition, the government seems to be plagued by rumours.

"This is not the only serious distortion in the circulation process of the Central Bank’s "Tonpyo". Now, there are rumours that "Tonpyo" was issued to raise the cost of living (meaning salary), rumours that fake "Tonpyo" have also been issued, as well as rumours that the "Tonpyo" was issued for the upcoming currency exchange (meaning devaluation of the currency), and rumours that the state will not accept old "Tonpyo."

◆Authorities Threaten with Punishment

"Tonpyo," issued by the Kim Jong-un regime as a last-ditch effort, have been rejected by residents and by markets. However, the authorities are trying to control their use by force.

“Stores, cafeterias, other service units, and markets, outdoor stores, and passenger buses must accept the Central Bank’s "Tonpyo" that customers provide for immediate service payment. We must make sure that the phenomenon of discounting the Central Bank’s "Tonpyo" never occurs.

The phenomena of discounting the Central Bank "Tonpyo" with immoral purposes, counterfeiting and trading "Tonpyo," and spreading "Tonpyo" related rumours to disturb the public sentiment must be vigorously addressed from the Party, administrative, and legal perspectives.”

“All cadres, workers, and residents must actively use the Central Bank’s "Tonpyo" and ensure that no slight distortion appears in the circulation process, thereby contributing to the country's money circulation, the building of a socialist economy, and the improvement of the people's livelihood.”

◆What is the latest situation?

After releasing this "Top Secret" document, did the distribution of "Tonpyo" proceed smoothly?　On November 11, we received a report on the latest developments from a partner living in the northern region.

"Even now, merchants don't want to accept "Tonpyo," so the amount distributed in the markets is small. They are saying to each other, 'We are told by the authorities to use it, but there is no way we can trust that stuff.'"

The issuance of temporary money coupons, which was a last-ditch effort by the Kim Jong-un regime, does not seem to be functioning well at the moment.

※ASIAPRESS contacts its reporting partners in North Korea through smuggled Chinese mobile phones.

◆ Translation of internal document designated as

※ Due to confidentiality concerns, some of the documents below have not been translated.

-----------------------------
Absolute Secret      Proposed Announcement

In the Party organizations, to execute the ratification task given by the respected and beloved comrade General Secretary on September 24, 2021, thoroughly, once you receive the political work materials entitled "On having a correct understanding of the national measure of issuing the Central Bank money coupons ("Tonpyo") and preventing the appearance of distortions in its circulation process", you must spread it among cadres, workers, and residents immediately.

You must report the progress of the political work to the Lecture Department
via the "computer network" by ●● October ●.

Our respected and beloved Comrade Kim Jong-un has said the following.

< Money circulation work is closely related to the issue of revitalizing our country's economy and stabilizing and improving people's lives. >

Recently, the state issued 5,000-won the Central BankBank "Tonpyo" and used it in various ways, including funds related to production and management activities of state institutions, factories, and enterprises, the living expenses of officials and employees, the savings of residents, and money on bank cards.

So, why did the nation decide to issue Central Bank "Tonpyo"?

We are vigorously waging a struggle to achieve a new victory in socialist construction amid severe challenges and obstacles. It is vital to ensure the smooth circulation of money in the country to mobilize all the potential power, carry out the economic construction goals set by the 8th Congress of the Party amicably, and stabilize and improve people's lives as soon as possible.

However, due to the prolonged global health crisis, the country has been unable to meet the cash needs of factories and enterprises for production and management activities, which has hampered economic construction and improvement of people’s livelihood.

To overcome the temporary difficulties in the circulation of money, the government has taken the initiative and issued 5,000 won the Central Bank "Tonpyo".

The Central Bank "Tonpyo" is a temporary currency with the same status as cash that is secured and issued by the state, and it performs the functions of circulation, means of payment, and means of savings with the same value as cash. In other words, the Central Bank "Tonpyo" can be used exactly as we use cash daily, without any restrictions, and can be freely exchanged with money.

However, the distribution process of the Central Bank "Tonpyo" is now showing a lot of distortions.

Some commercial service organizations, markets, and residents refuse to accept the Central Bank "Tonpyo", claiming that they would be in trouble if the bank would not exchange it for cash later and that the quality of the “Tonpyo” is inferior to the 5,000 won bill. What is even more serious is that in some outdoor stalls and markets, service workers and salesclerks are trying to take 5,000 won “Tonpyo” discounted to 4,000 won or 3,800 won.

This is an act of diminishing the value of state-issued “Tonpyo” and must be considered a harmful act of turning the circulation of the Central Bank "Tonpyo" into a money-making opportunity.

This is not the only serious distortion that has appeared in the Central Bank "Tonpyo" circulation process.

There are now rumours that the “Tonpyo” was issued to raise the cost of living (meaning salary), that counterfeit bills have been printed, that the “Tonpyo” will soon be issued for monetary exchange, and that the state will not accept outdated “Tonpyo.”

All of these rumours are entirely unproven stories made up by some immoral people to create confusion in the distribution of “Tonpyo.” Nevertheless, those who are ideologically sloppy take it as it is, and when they are asked to explain it, they add their ideas to it.

We have to keep in mind that any phenomenon that interferes with the distribution of the Central Bank "Tonpyo" no matter how big or small, is an anti-state and anti-people act that challenges state measures and misleads the public. We have to make sure that the distribution of “Tonpyo” is not distorted in the slightest.

It is vital to understand the Central Bank "Tonpyo" well.

The Central Bank "Tonpyo" shows the usual water pattern in the shape of an orchid flower and the white water pattern in the form of the face value of 5.000 when viewed in the light. The words on the surface of the “Tonpyo,” the year of issue, and the face value with a golden lustre effect give a distinctive feeling when touched.

In addition, if you point an ultraviolet light at the centre of the surface of the "Tonpyo" (the triumphal arch-shaped surface) between the number 5,000 written in the upper right corner and the 5,000 won written at the bottom, you can see the word 5,000 in pale green. Due to such anti-counterfeiting techniques, the Central Bank "Tonpyo" can be easily distinguished from fake “Tonpyo.”

Once the Central Bank "Tonpyo" has been defaced or partially torn in the process of use, it can be exchanged for “Tonpyo” or cash at any bank without restriction, as long as the numbers engraved on both sides are the same and the anti-counterfeiting sign is still intact. Therefore, if the Central Bank "Tonpyo" becomes defaced in the course of its use, it can be immediately exchanged at the bank.

We must be aware that the Central Bank "Tonpyo" has the same value as the cash currently in circulation. Therefore, when money production normalizes in the future, it will all be collected and exchanged for money without delay, and we must actively use “Tonpyo.”

Stores, cafeterias, other service units, and markets, outdoor stores, and passenger buses must accept the Central Bank "Tonpyo" that customers provide for immediate service payment. We must make sure that the phenomenon of discounting the Central Bank "Tonpyo" never occurs.

The Central Bank "Tonpyo" is a valuable national asset and a necessary creation that embodies the spirit of self-reliance and rehabilitation, made with 100% domestic raw materials and resources. Therefore, we must treat them properly with a patriotic heart and use them neatly to be used for as long as possible.

We must fight vigorously against any activity that impedes the circulation of the Central Bank "Tonpyo", seeing it as a severe impediment to economic development and the improvement of people's lives. Activities that cause inconvenience to people's lives because they do not accept the Central Bank "Tonpyo" must be immediately stopped by waging a mass struggle.

Suppose fake or altered the Central Bank "Tonpyo" is found during use. In that case, the relevant law enforcement agencies and banks must be notified immediately to prevent fake “Tonpyo” from being distributed.

The counterfeiting and buying and selling “Tonpyo” and the disturbing of public sentiment by spreading “Tonpyo”-related rumours must be vigorously countered from the Party, administrative and legal perspectives.

All cadres, workers and residents must actively use the Central Bank "Tonpyo" and ensure that not even the slightest distortion appears in the circulation process, thereby contributing to the country's money circulation, the construction of a socialist economy and the improvement of people's lives. (end)