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Why is cash considered a fungible form of digital currency?

avatarPRASHANT GAUTAMDec 27, 2021 · 3 years ago1 answers

Can you explain why cash is considered a fungible form of digital currency? What are the characteristics of cash that make it fungible?

Why is cash considered a fungible form of digital currency?

1 answers

  • avatarDec 27, 2021 · 3 years ago
    Cash is considered a fungible form of digital currency because it can be easily divided and combined. Unlike physical assets, such as real estate or stocks, cash can be broken down into smaller units without losing its value. For example, if you have a $100 bill, you can easily exchange it for ten $10 bills or twenty $5 bills. Similarly, you can combine smaller units of cash to create larger denominations. This divisibility and combinability make cash highly fungible and convenient for transactions.