Definition ∞ Asset fungibility means that each unit of an asset is interchangeable with any other unit of the same asset. In digital assets, this implies that one coin or token is identical in value and properties to another of the same type. This characteristic is essential for efficient trading and standardized valuation within digital markets.
Context ∞ The discussion around asset fungibility in crypto news often concerns privacy coins, where transaction history obfuscation aims to maintain fungibility by preventing specific units from being tainted. Regulatory bodies also scrutinize fungibility for anti-money laundering purposes, seeking to track asset origins. The degree of fungibility can significantly impact an asset’s acceptance and utility in various financial applications.
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