Eli5 Why do some countries measure their currencies in large units?

Question

For example in Vietnam, lunch can be bought for 50,000 VD and in South Korea, apartments can cost several MILLION Won. Why do some countries use such large denominations?

In: Economics

Answer 1

Can’t speak for Vietnam but in Korea, units used in money do not reset when going from coin to paper bills. In the US, coins are cents and paper bills are dollars. You have the 1, 5, 10, 25 cents then it transitions to bills where the numbering restarts so that the smallest bill is 1 dollar. In Korea, all currency is called won. Coins go 1, 5, 10, 50, 100, 500 won and bills continue the numbering from there so the smallest bill denomination is 1,000 won and the highest is the 50,000 won.