Definition ∞ Fungibility assurance guarantees that individual units of a digital asset are interchangeable and indistinguishable from one another. This characteristic ensures that each unit holds the same value and properties as any other unit of the same asset. It is a foundational element for assets intended to serve as currency or standardized commodities. Maintaining fungibility is crucial for market liquidity and trust.
Context ∞ Fungibility assurance is a recurring topic in discussions about privacy coins and regulatory compliance within crypto news. Debates often center on how to preserve fungibility while addressing concerns about illicit activities. Technological advancements aim to strengthen this property through methods that enhance transaction privacy and unlinkability.
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