Definition ∞ Fungible assets are items or units that are interchangeable with other individual units of the same type, possessing identical value and properties. In the digital asset space, cryptocurrencies like Bitcoin or Ethereum are prime examples, as one unit is indistinguishable from another. This interchangeability facilitates their use as currency and enables efficient trading and liquidity within markets. The concept is fundamental to understanding the nature of many digital tokens.
Context ∞ The distinction between fungible and non-fungible assets is a central concept in the digital asset market, particularly with the rise of NFTs. Discussions often address the legal and accounting implications of fungibility, especially in regulatory contexts. A critical future development involves the creation of new hybrid asset types that combine aspects of both fungibility and uniqueness, expanding the utility and design possibilities within decentralized finance and digital economies.
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