Greetings everyone,
Are there any articles, websites, or books that address the mechanics of spot institutional forex vs spot retail forex that I can read about?
I understand as a spot retail fx trader that when I place a trade with my broker that no actual physical or digital dollars, pounds, euros, or yen are exchanged between me and my broker-dealer. However, they may or may not hedge their exposure to my trade in the “real” interbank market.
My question then do institutions such as hedge funds actually trade physical and or digital currencies with each other and other institutions and actually take possession of it?
It is a very interesting question to query what actually IS money and where does it come from and go to! 
the difference between a retail trader trading through a broker and a client buying/selling currency through a financial instutional is whether there are actually bank accounts where the funds are withdrawn and deposited. This means that in addition to the actual currency deal with the bank dealers there is also a back-office activity actually arranging the debit and credit of the two currencies from and to the appropriate accounts.
However, with retail trading through a broker there is no actual money changing hands at all. It is just a hypothetical nominal amount and an agreement to simply settle the difference in value when the transaction is reversed. In reality, the difference in value is reviewed continually and is shown as a real-time adjustment in your margin account. If the difference is negative and reaches the limits of your margin funds then the broker will automaticallyclose the position. There are no bank account numbers given or settlement dates or SWIFT fund transfers etc.