According to Bob Lammle in an article written on September 26, 2012, for https://mentalfloss.com. “There are many examples of traditions that build camaraderie in the military. Few are as well-respected as the practice of carrying a challenge coin, a small medallion or token that signifies a person is a member of an organization.”
In ancient Rome, when an enlisted man performed well during a particular battle, officers handed him a coin with the mark of the legion from which it came. The coin, in addition to his pay, could be used as cash. Some men held their coins as souvenirs.
During The Great War or WWI, a wealthy officer had bronze medallions struck with his flying squadron badge to give to his men. Little did he know how important that coin would become.
One young flying ace was shot down over Germany and captured. The German’s took everything on his person except a small leather pouch he wore around his neck containing the medallion. They dressed him in German civilian clothing stripped of any military insignia. The pilot escaped and made his way to France with no identification. The French believed he was a spy and sentenced him for execution.
While contemplating his predicament, the pilot remembered his medallion and showed it to his captors. A French soldier recognized the badge. The execution was delayed. Later, they confirmed his identity and sent him back to his unit. The challenge coin saved his life. Today all services of the U.S. Military, as well as many civilian groups, present challenge coins, often with a special handshake to deserving members. These coins can be readily purchased, and are usually collected. Receiving one is an honor.
Korean Conflict Era Veteran Hilton Henderson