Asset-Liability Management

Definition ∞ Asset-liability management is the practice of overseeing financial assets and liabilities to reduce risks arising from interest rate changes or other market factors. This process seeks to optimize net interest income and maintain adequate liquidity. It involves strategic adjustments to asset holdings and debt obligations to meet financial objectives. Effective management safeguards an entity’s financial health.
Context ∞ In the digital asset sector, asset-liability management is gaining importance for stablecoin issuers and decentralized finance protocols to maintain peg stability and solvency. Regulators are increasingly scrutinizing these practices to ensure consumer protection and systemic stability within crypto markets. Transparent reporting of asset reserves remains a central concern.