Definition ∞ Fungible tokens are interchangeable digital assets, meaning each unit is identical to another. These tokens possess a uniform value and can be swapped for one another without any loss of utility or distinction, similar to fiat currency or gold. Cryptocurrencies like Bitcoin and Ethereum are primary examples, where one unit holds the same worth and properties as any other unit. Their fungibility enables seamless transactions and liquidity within digital economies.
Context ∞ The discussion around fungible tokens often highlights their role as the primary medium of exchange and value transfer within blockchain networks. A key debate involves their regulatory classification, particularly concerning their status as commodities or securities across different jurisdictions. Future developments will include enhanced privacy features for fungible tokens and broader integration into traditional financial systems.
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