thatguyoverthere on Nostr: I can accept that serialized bills aren't really fungible but in practice the ...

I can accept that serialized bills aren't really fungible but in practice the tracking isn't done. If a drug dealer buys a pack of cigarettes at the corner store with a 20 they got from a junky there is no proving it. The laws are constructed such that when you get caught with both drugs and money they assume the money is drug money unless you can prove otherwise. If it were the case that drug money wasn't fungible then they'd track down the previous owners of any confiscated currency.