Challenge coins have a long history in the military. There are several stories on what roles these coins have played in the military.
A story tells of how challenge coins were used in the Roman legion. It was given as bonus payment to Roman soldiers for exemplary service. These coins had special markings. Often, the symbol of the legion to which the soldier belonged to and the emperor’s face were stamped on these coins. A few spent these coins on wine to celebrate, but most saved these coins as a reminder of their time in the legion. These coins were given so much importance that a few were handed down as heirlooms.
Fast forward to the next few centuries — the use of challenge coins resurfaced in the military. During World War I, a soldier’s life was saved by one. The soldier was captured by German forces. He escaped and went to France. There, the French troops suspected him of being a spy belonging to the enemy forces. He would have been executed if not for the coin with the Allies’ symbol stamped on it. The execution was called off, his identity was verified, and he was sent back to his unit.
The term “challenge coin” originated from the practice of challenging other soldiers to bring out their coins in Germany, shortly after the end of World War II. The one who couldn’t place his coin on the table in time would have to buy everyone drinks. This practice started in bars, using German coins or pfennigs. In more recent years, the coins would be asked for at anytime — during meals, showers, or drills. The one who couldn’t show his coin would have to suffer penalties, such as buy drinks or clean the barracks.
The coins caught on during the Vietnam War. The soldiers carried a single bullet, considered to be the “last resort.” The bullet was supposedly used to commit suicide when caught by the enemy. The bullets were carried with pride, and would often be used to display machismo. The practice escalated from a single bullet to larger ammunitions. Soldiers would slam their ammos on a table to see who had the biggest and most dangerous one. To curb the dangerous practice of slamming live ammo in public places such as bars, challenge coins were used instead. The Special Forces minted special coins for their men, which they used for these challenges. Soon, other units were minting their own special coins.
Another story about these special coins is how they were given out. Some of these coins were given out through secret handshakes. What seems like a simple handshake during public ceremonies may actually be a ploy wherein a special coin is handed out. This practice is believed to originate from the Second Boer War between South African colonists and the British. Mercenaries were hired by the British forces to aid them in war. Because these people were not recognized as legitimate troop members, they were not eligible to receive awards for exemplary service. The award went to their commanding officer. These non-commissioned personnel would cut off the medallion and hand it to the deserving soldiers in a public ceremony, handing over the medallion covertly during a handshake.
Soldiers would hold on to these coins everywhere they went. There are even stories about soldiers keeping these coins within arm’s reach at all times.
In recent years, the importance of these coins has significantly waned. A few coins are still used as an ID or badge to prove membership to certain units. Sometimes, these coins would be given out for exemplary service and some soldiers still keep them as keepsakes.
Most often, administrators hand challenge coins out much like business cards. Some are even sold to the public during fund-raising events.