Meaning of Fungible

Fungibility refers to the capacity of a particular currency to maintain its standard value while also possessing uniform acceptance.

This implies that each unit of the currency holds equal value to every other unit of the same currency.

In cryptocurrencies, fungibility represents a coin or token that can be effortlessly substituted with another identical coin or token, as they are mutually interchangeable.

Fungibility and its Limits

Gold is commonly regarded as fungible since one ounce of gold is equivalent to another.

However, there are instances where this is not the case.

When a fungible commodity is assigned a serial number or other distinguishing marks, its fungibility is compromised.