Military Coins' Origins
Military coins have appeared in the U.S. at least as far back as the Civil War. While originally some were a substitute for currency, others were of a commemorative nature, representing posts, units, campaigns or ships. They are no longer a "currency" type of coin but a medallion used as token of reward, recognition or esprit de corps. They can represent a unit, organization, branch of service, commander or event. They also are used as "challenge coins," costing or earning an owner drinks at the bar or a lowly work detail.
Obtaining Military Coins
When coins were less common, they were very protected by units. Now they can be purchased but are usually presented to individuals. A unit may give a coin to new members to make them part of the team or as a token to someone for supporting that unit. Commanders and senior non-commissioned officers will often present coins to individuals for recognition of outstanding work. Coins also are created for a particular war, battle or campaign.
Military Challenge Coins
Though there is debate about when military coins became "challenge coins," it became prevalent during the Vietnam era. A coin is issued to each member of an organization--such as a flying squadron, infantry battalion or other proud unit--as a symbol of serving in that unit. The member is expected to carry that coin at all times and can be "challenged" by another member producing his own coin--usually holding it in the air or rapping it on the bar. Failure to produce one's coin can result in buying drinks or getting the dirty work detail. Rules for challenge coins vary from unit to unit but cover details such as "Must show the coin within 30 seconds" or "Coin must be within four steps." Some rules allow "safe" areas/times, but some soldiers have been caught coin-less in the shower or latrine.
Collecting Military Coins
As the military moved into an era during which bars within units are no longer being sanctioned, and more and more units are creating coins, they have become more popular now as collectibles rather than beverage-producing symbols of unit pride. The number and variety of designs, shapes and color schemes can lead to diverse and interesting collections.
Legends
Two primary legends are circulated regarding the origins of the military coin. While both can be shown to be too late for the appearance of military campaign or unit-type coins, they may account for the tradition of coins being used as "challenge coins." The first tells of an American World War I flying squadron in which a wealthy member created medallions containing the squadron emblem for all of the pilots. When one was shot down behind enemy lines and had to escape back to friendly lines, he was only able to convince the French forces that he was not a spy by producing his coin with the squadron emblem. After that, all of the pilots were constantly "challenged" by each other to ensure they carried their coins at all times. The second legend carries over from Vietnam. Members of units would carry personal bullets that others would challenge them to produce at the bar. As the bullets got bigger and more dangerous, coins supposedly became suitable substitutes.