The Falkland Islands previously used British homeland coinage, but in 1974 it introduced its own circulation coinage. The coinage of the UK is also legal tender on the islands.
The territory has its own currency, the Falkland pound. It is a separate currency from the UK pound sterling, but it is pegged to the UK pound at a rate of one to one.
The Falkland pound is created by the Falkland currency board and is fully backed, 100%, by reserves of the UK pound sterling, its anchor currency. For a fuller explanation of currency boards, read this topic:
There are only four basic currency systems in the world The territory's coins are minted to the same specifications of size, shape, colour and weight as their UK counterparts. The UK had already adopted the decimal system in 1971, and its coins included the legend "NEW PENCE", but it removed any reference to "NEW" pence from its coinage in 1982. The Falkland coins were first issued in 1974, but they omitted any reference to "NEW" in their legends by using only numerals to represent the denominations, without "PENCE", "p", or anything else.