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During WW1, a lieutenant of an American flying squadron, developed and gave a coin to each of the members of his unit. When the coin became a means of identification that saved one member from execution, it became a tradition for the squadron to carry their coin at all times as a medallion. To ensure compliance, a challenge was created where one would ask the other to show their coin. If someone from the unit could not immediately produce the coin, the penalty was to purchase drinks for all the members of the group present. If all had the coin, the challenger would be responsible for the purchase.
The challenge coin tradition has carried on around the world, with many elite groups adopting it as a means of proving fellowship and loyalty to their unit.