FX is a shared or "distributed" market between the institutions that trade, such as big international banks and other market participants. They would use a shar

FX is a shared or "distributed" market between the institutions that trade, such as big international banks and other market participants. They would use a shared electronic market (reporting) to determine the price. It's not exchange (as in NYSE) based. The exchange rate is set by what the market participants are willing to trade at. Banks can hold numerous currencies by having banking licences in the respective countries. See here for more details: https://en.wikipedia.org/wiki/Foreign_exchange_market https://en.wikipedia.org/wiki/Foreign_exchange_market