The UK is getting a new £1 coin.  Its designers, the Royal Mint, claim that unlike current coins, it includes built in technology for high speed authentication and verification everywhere from ATMs to vending machines and point-of-sale.

How does this work?  Something like RFID?  Does this mean the coins (and therefore their users) can be tracked?

They are using a system called ISIS which also has some more details available here.  It appears to be a form of micro-tagging embedded within the currency itself (based on the comment the same technology has been used in fuels and perfumes).  

Basically, a specially manufactured particle is constructed and then mixed as an additive with the coin.  This additive can later be detected automatically.  Since the composition of the additive is unknown, it can't be reproduced easily but yet machines can read the signature of it.

The tagging technology can be used to tag specific coins (this is done for some high end unique items that are tagged), but it would generally be very expensive to do so.  It is far more likely that a standard formulation is used for all coins of a given value.  It would also still very likely require that the coin be directly handled to read as it is not a radio based technology.
