The custom dates back to the seventeenth-century practice of Polish Jewry giving money to their small children for distribution to their teachers. In time, money was also given to children to keep for themselves. Teen-age boys soon came in for their share.
According to popular legend, this practice has its roots in the miraculous victory of the Maccabees over the ancient Greeks. In celebration of their victory, the Hasmoneans minted national coins.
Parents often give children chocolate coins to play dreidel with. In terms of actual gelt (money), parents and grandparents or other relatives may give sums of money as an official Hanukkah gift. According to a survey done in 2006, 74 percent of parents in Israel give their children Chanukah coins
In Chasidic communities, the Rebbes distribute coins to those who visit them during Hanukkah. Chasidic Jews consider this to be an auspicious blessing from the Rebbe, and a segulah for success. The amount is usually in small coins.