Definition ∞ Cash concentration is a treasury management strategy where a company gathers funds from multiple bank accounts into a single main account. This process optimizes liquidity management by consolidating cash balances. It allows for more efficient deployment of capital and reduces overall borrowing costs. This financial practice streamlines the oversight of organizational funds.
Context ∞ In the context of digital assets, cash concentration principles apply to how large entities manage their holdings across various exchanges or decentralized finance platforms. This strategy helps institutions maintain sufficient liquidity for operations and manage risk exposure effectively. Monitoring such movements can offer indicators of institutional activity and market sentiment within the digital asset space.
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