Ordinary people’s distrust of financial institutions remains strong
Banks are some of the least trusted institutions in North Korea. Faith in them completely eroded after the currency reform of 2009. Because of this, wealthy individuals, or donju, try to keep their assets in foreign currencies such as dollars or yuan rather than North Korean won. This practice has naturally carried over to ordinary North Koreans as well. Some North Koreans even sarcastically say North Korean currency “is as worthless as grass.”
North Korean authorities are not happy about this “dollarization,” which is to say, the use of foreign currency instead of their own. If North Koreans continue to shun local currency, not only does this render authorities unable to stimulate the economy through monetary policy, but it can also lead to sudden instability due to fluctuations in prices and exchange rates. In this case, one could see the regime’s base of control weaken as people’s livelihoods grow increasingly insecure.
Accordingly, North Korean authorities are working to stop this dollarization by improving the financial system. ......