For foreign exchange transactions conducted by centralized matchmaking, the exchange rate is determined by the competitive quotations of both parties to the foreign exchange transaction. A large number of foreign exchange trading orders are gathered in the exchange, and the representatives of both sides of the transaction look for the appropriate exchange rate in the form of auction bidding. When the buyer offers to buy a certain amount of foreign exchange, the seller of foreign exchange transactions will quote the exchange rate he is willing to sell, and the buyer of foreign exchange can choose the lowest quotation from many exchange rate quotations, so that both parties to foreign exchange transactions can complete foreign exchange transactions according to this exchange rate. Similarly, when the seller offers to sell a certain amount of foreign exchange, the buyer of foreign exchange transaction will quote the exchange rate he is willing to buy foreign exchange, and the foreign exchange seller can choose the highest exchange rate quotation from many exchange rate quotations. If in the continuous foreign exchange transactions, foreign exchange buyers and sellers constantly put forward their willingness to buy and sell, and at the same time, the corresponding foreign exchange buyers and sellers constantly compete for quotations, then the exchange rate is determined through this staggered continuous bidding process, and the exchange rate at this time is the equilibrium exchange rate generated by competition. However, the emergence of this equilibrium exchange rate also has some shortcomings, because the exchange rate generated by competition may be irrational; In addition, the emergence of this exchange rate lacks room for bargaining.

Centralized bidding for foreign exchange transactions refers to the way in which multiple trading entities in the market conduct foreign exchange transactions through a trading system or platform at the same time according to certain bidding rules. For example, at present, the trading mode of China's inter-bank foreign exchange market is based on the bidding rules of time priority and price priority.