"The interbank market is a market for Banks. Small and mediumsized clients of Banks cannot directly participate in the interbank market. If a Bank is a member of a currency futures exchange, it can trade on behalf of its small and medium-sized clients, who otherwise would not have been able to benefit from fluctuations in currency exchange rates. Thus, Banks can increase their customer base if they become a member of a currency futures exchange. Banks themselves can also benefit from a currency futures exchange by arbitraging between the existing interbank market and the currency futures exchange. Larger participation in a currency futures exchange gives the exchange platform a greater vibrancy than the interbank market, which is limited to Banks." Source: CoolInterview.com
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