what is fungibility 
fungibility is the ability of a good or asset to be interchanged with other individual goods or assets of the same type fungible assets simplify the exchange and trade processes because fungibility implies equal value between the assets understanding fungibilityfungibility implies that two things are identical in specification individual units can be mutually substituted specific grades of commodities such as no 2 yellow corn are fungible because it does not matter where the corn was grown all corn that s designated as no 2 yellow corn is worth the same amount commodities common shares options and dollar bills are all examples of fungible goods cross listed stocks or the shares of stock listed on multiple exchanges are still considered to be fungible the shares represent the same ownership interest in a firm whether you purchased them on the new york stock exchange or the tokyo stock exchange fungibility is commonly associated with finance but it s also found in other disciplines such as quantum physics cryptocurrencies are generally considered to be fungible assets but some are unique and not interchangeable they re non fungible tokens nfts fungible vs non fungiblefungible assets are of like kind which makes them interchangeable non fungible assets on the other hand have something unique about them that means one cannot be replaced by another money is another example of a fungible asset it doesn t matter to person a if they re repaid with a different 50 bill if person a lends person b a 50 bill it s mutually substitutable person a can be repaid with two 20 bills and one 10 bill and still be satisfied because the total equals 50 conversely it s not acceptable for one person to borrow a car from another person and then return a different car even if it is the same make and model as the original this is an example of non fungibility cars aren t fungible with respect to ownership although the gasoline that powers the cars is other examples of non fungible assets are special considerationsthe line between fungibility and non fungibility may be a thin one gold is generally considered to be fungible because one gold ounce is equivalent to another gold ounce but when otherwise fungible goods are given serial numbers or other uniquely identifying marks they may no longer be quite as fungible adding unique numbers to bars of gold collectibles and other items makes it possible to distinguish them which makes them non fungible for example the federal reserve bank of new york offers gold custody services to central banks and governments around the world by storing gold bars in its underground vault all the gold bars deposited into the vault are weighed and inspected to confirm they match the depositor instructions the exact bars deposited to the new york fed are the exact ones returned upon withdrawal so these types of gold deposits are not considered fungible 1