What is "fungibility"

n. the property of a good or a commodity whereby individual units are capable of mutual substitution.

n. the quality of being capable of exchange or interchange [syn: exchangeability, interchangeability, interchangeableness] [ant: unexchangeability]

Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution. That is, it is the property of essences or goods which are "capable of being substituted in place of one another." For example, since one ounce of pure gold is equivalent to any other ounce of pure gold, gold is fungible. Other fungible commodities include sweet crude oil, company shares, bonds, other precious metals, and currencies. Fungibility refers only to the equivalence of each unit of a commodity with other units of the same commodity. Fungibility does not relate to the exchange of one commodity for another different commodity.

The word comes from Latin fungibilis from fungī, meaning "to perform", related to "function" and "defunct".