If I tell you, I'd have to kill you.
I don't know the exact history of them, but IIRC, they really began in the SpecOps community. Like everything else SpecOps does, someone from Big Army wanted to imitate, probably in order to raise morale and espirit de corps. So, they started handing out challenge coins and the phenomenon caught hold. Nowadays, you get a coin for just about anything.
You uncovered a cache of arms, ammo and explosive in Kosovo? Here, have a BN coin while we give your squad leader, who did nothing more than lay it out on a poncho for the Stars and Stripes photographer, an ARCOM.
You repaired a bunch of old deuce-and-a-halves, so that they could be turned in to the depot? Here, have a BN coin.
Both of those are examples that I personally witnessed. The first incident was one in which I was directly involved, but that's another story.