The Gemara in Masechet Kiddushin (8) tells that Rav Kahana, who was a Kohen, once received as his Pidyon Ha’ben payment a certain type of garment that was worn as a head covering. The question arose as to whether the father fulfilled the Misva by giving Rav Kahana this garment. The Gemara comments that clearly, if the garment was worth the required amount for Pidyon Ha’ben – five silver coins (or the value of 93 grams of silver) – then the Misva was fulfilled through this transaction. However, the Gemara notes that in this case, the garment was worth less than the required amount – but nevertheless, the Misva was fulfilled. The reason, the Gemara explains, is because for Rav Kahana, this garment was as valuable as the required amount for Pidyon Ha’ben. Since he was a man of stature, who would always wear this kind of head covering, the garment was more valuable for him than it was for other people, and thus, the Misva was fulfilled by the father giving Rav Kahana this garment, even though its market value was less than the required amount for Pidyon Ha’ben.
The Shulhan Aruch (Yoreh De’a 305), based on the ruling of the Rambam, understands the Gemara to mean that such a transaction suffices for the Misva of Pidyon Ha’ben as long as there is somebody else in the world – besides this Kohen – for whom this item is truly worth five silver coins. As long as there is somebody for whom the object is worth this value, then if the Kohen says that he regards the object as though it’s worth that amount, the Misva is fulfilled, even though the object is not worth the required amount in the market. The commentators to the Shulhan Aruch (Shach and Taz) note that in such a case, the Kohen must realize that he has the right to something more valuable but he is foregoing on this amount. Indeed, the Gemara made a point of noting that Rav Kahana was able to accept this garment for Pidyon Ha’ben because he was a “Gabra Rabba” (“great man”). This point was perhaps emphasized to demonstrate that this method of payment is sufficient only if the Kohen is scholarly enough to understand that he is accepting something worth less than the value to which he is entitled.
We should add that in any event, the widespread custom is to use silver coins for the Misva of Pidyon Ha’ben. Thus, although an object of value may be used, even if it is worth less than five silver coins, as discussed, nevertheless, it is preferable to follow the accepted practice and use silver coins.
Summary: Technically speaking, one may perform a Pidyon Ha’ben by giving the Kohen an object of value, even if it is worth less than the required amount (the value of 93 grams of silver), as long as the Kohen says that he values the object at the required amount, and there is somebody else in the world for whom it truly is worth that amount. In practice, however, it is customary to use silver coins for the Misva of Pidyon Ha’ben.