Fungible
| What is fungibility? Fungibility is the property of a good or commodity whose individual units are capable of being substituted in place of one another. That is, it is the property of a good or commodity whose individual units are interchangeable. The term fungibility is derived from the Latin word fungibilis, which means "to be used in place of, or to be interchangeable with, another." Fungibility is a key feature of money and other financial assets. It is what makes them interchangeable and therefore exchangeable. Without fungibility, money and other financial assets would not be able to function as a means of exchange. Fungibility is what makes it possible for two people to exchange two different pieces of paper money for goods or services of equal value. Fungibility is also what makes it possible for two people to exchange two different pieces of gold for goods or services of equal value. Gold is fungible because each gold coin or bar is exactly the same as every other gold coin or bar. There is no way to tell one gold coin or bar from another. Similarly, paper money is fungible because each bill is exactly the same as every other bill. There is no way to tell one bill from another. Fungibility is an important concept in Economics and Finance. It is a key feature of money and other financial assets. Without fungibility, money and other financial assets would not be able to function as a means of exchange. |
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