Something is considered fungible when it has the characteristic of being consumed due to its use. Thus, the fungibility of a good refers to the deterioration or wear of something as a result of its use. In this way, gasoline, money or food are clear examples of expendable goods, since when making use of them they disappear, are consumed or are transformed. On the contrary, a good is non-fungible when it is not possible for it to be replaced by another identical or equivalent (an original painting, a book with a dedication and everything that has a unique and unrepeatable character). While the fungible does not have individuality (it can be exchanged for something of the same gender and in the same quantity), the infungible does have an exclusive dimension and it is impossible to exchange it for something equal.
The idea of fungibility implies that there is an equivalence relationship between two things that are different but have the same value and are perfectly interchangeable with each other (for example, a new dollar bill is worth the same as an old one).
Fungibility in the field of law
In the sphere of civil law, the nature of the property is relevant to determine the patrimony of an individual and the obligations he has over them. From the point of view of law, a good is anything that has a value or has a specific utility. Consequently, there are two types of goods: those that are consumed and those that are not. The former are fungible and are, for example, everything that is loaned or given to be consumed. In this way, the possession of a share of an entity, the loan of something to another person or an inhabited house in usufruct conditions are concrete examples of goods that are subject to fungibility.
Fungibility of money
Money is a good that, by definition, has a fungible character. If someone lends another person 100 dollars, they do not care about the combination of bills when they receive the 100 dollars again (five of twenty dollars or two of fifty), since the only relevant thing is the return of the amount of money borrowed .
The fact that money is fungible makes it a singular good, since it affects the set of economic operations: bank deposits, loans, savings plans or the simple fact of buying something with money. Thus, the fungibility of money has consequences not only as a good that is consumed but also in the legal field (the legal acts in which there is an economic transaction are very diverse).
The fungibility of money with respect to things is a function of the market value that a thing possesses.
