Vatican City has its own bank -- Istituto per le Opere di Religione, aka IOR aka Vatican Bank -- that issues its own coins. Up until January 1, 1999, coins were denominated in Vatican lira currency, which was on par with the Italian lira. On January 1, 1999, they adopted the Euro.
This circulating commemorative coin was issued in 1950 under the reign of Pope Pius XII and features a dove of peace flying in front of St. Peter's Basilica.
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