|“||Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution. That is, it is the property of essences or goods which are "capable of being substituted in place of one another." For example, since one ounce of gold is equivalent to any other ounce of gold, gold is fungible. Other fungible commodities include sweet crude oil, company shares, bonds, precious metals, and currencies. Fungibility refers only to the equivalence of each unit of a commodity with other units of the same commodity. Fungibility does not relate to the exchange of one commodity for another different commodity.||”|
Bitcoin has been shown to not possess true fungibility due to easily performed traceability and blockchain analysis. Bitcoins can become tainted if they were used for illicit activities, making them less exchangeable than a coin that was recently mined or not used illicitly.
Because Monero (and other CryptoNote based coins) are untraceable, they are fungible. Any coin is exchangeable for any other coin regardless of how it has been previously used.