The term “convertibility” refers to the quality or state of being convertible, which means the ability to be exchanged or transformed into another form or type. In finance, it often relates to the capacity of a currency to be exchanged for another currency, or the ability of a financial instrument, such as a bond, to be converted into equity. More generally, it can refer to the potential for one thing to be changed into another, whether that be physical forms, currencies, or other types of assets.
