Challenge coins are part of a bar game. When the coin is demanded while drinking at a bar, it must be produced or the person who it was demanded of must pay for drinks all night. If the person can produce the coin, the drinks are on the challenger instead.
Challenge coins are common in the United States military and are produced for units such as squadrons. They generally bear the group's insignia and motto. A special coin is also typically issued to each troop to commemorate their graduation from basic training. Challenge coins may also be found in other walks of life, such as motorcycle clubs.