Fungible assets simplify the exchange and trade processes. Fungibility implies that two items have identical parameters, where individual units can be mutually substituted without a change in value. Commodities, common stock shares, and dollar bills are examples of fungible goods.
Another good example is Bitcoin. If Jenna lends Samantha 1 bitcoin, it does not matter to Jenna if they are repaid with a different bitcoin, as it is mutually substitutable. In the same way, Jenna can be repaid with .4 bitcoin in one transaction and .6 bitcoin in a second transaction. This is because the total would still be 1 bitcoin repaid, and there is no difference in value between any bitcoins.
See also the definitions for Non-Fungible and Semi-Fungible.
