Should money be fungible?
Should money be fungible?
Fungibility is different from liquidity. A good is liquid if it can be easily exchanged for money or another good. A good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time, place, etc.
In particular, money is fungible: a $10 banknote is interchangeable with any other similar banknote. It is also interchangeable with two fives, ten ones, or any combination of notes and coins worth $10 together. However, there are also situations where money is not fungible. This is of course clear for counterfeit money, but even if you have paper money with a number from a ransom payment of a kidnapping, it is not certain that you can use that note. The best example of fungible money is precious metals. If you steal a numbered gold bar, it must be melted down so that no one can trace its origin.
So the answer is “No” it is not necessary for money to be fungible. However, as long as it is clear that money is “legal”, it is normally just fungible.
Still Have Questions?
The 1CoinH / Ethical Money system is nothing like we have ever seen before. We can imagine you have plenty of questions left.
Please don’t hesitate to ask us. It also helps us to understand what we haven’t explained well enough.
