Meaning

noun a commodity that is freely interchangeable with another in satisfying an obligation

adjective of goods or commodities; freely exchangeable for or replaceable by another of like nature or kind in the satisfaction of an obligation

origin1765 as noun, 1818 as adjective, from Medieval Latin fungibilis, from Latin fungor (“to perform, discharge a duty”) + -ible (“able to”). Originally a legal term, going back to Roman law: res fungibiles (“replaceable things”).

Etymology from Wiktionary, CC BY-SA 3.0