The British North Borneo Company had the right to produce coin under its Royal Charter, granted in 1881. It had 1 cent coins struck in England from 1882 and 1/2 cent pieces from 1885. These coins were linked to the silver dollar as used in the Straits Settlement and Hong Kong.
In 1903-1904 it moved from the use of bronze to copper-nickel, issuing 1 cent and new denominations of 2 1/2 cents and 5 cents in that metal.
The copper-nickel two and a half cent coin measured 75 grains in the measurement units of the time, which is equal to 4.85 grammes, and had a composition of 75% copper and 25% nickel.
It was first authorised for circulation by Currency Ordinance No.11 of 1903.
The 2 1/2 cents denomination was short-lived, with only two issues.
The currency of the British North Borneo Company was demonetized on 1st September 1953, after which date the currency of the Board of Commissioners of Currency Malaya and British Borneo became sole legal tender. The latter was gradually replaced by the coinage issued by Bank Negara Malaysia which was introduced in Sabah in 1967 and finally became sole legal tender on 16th January 1969.