Fungibility
/ˌfʌndʒɪˈbɪləti/
Definitions
- (n.) The quality of an asset or item whose individual units are interchangeable and indistinguishable from each other.
Money has fungibility because one dollar bill is equivalent to another.
- (n.) The capability of goods or commodities to be exchanged or substituted by others of the same kind without loss of value.
Fungibility is essential in commodities markets to ensure smooth trading.
Related terms
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Commentary
Fungibility is key in drafting contracts involving payment or exchange to ensure clarity on substitutability of goods or currency.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.