Health What is the purpose of a challenge coin? What is the purpose of a challenge coin? A challenge coin is a small coin or medallion, bearing an organization's insignia or emblem and carried by the organization's members. Traditionally, they might be given to prove membership when challenged and to enhance morale. Related Posts:What is the purpose of challenge coins?What is a 1912 British penny worth?Peter Rexford has a guide to 1974 penny value.Is Best Buy Insignia brand good?