That is incorrect. It does not require an exchange for me to move money in and out of Bitcoins. All I have to do is find another human who is willing to trade Bitcoins for another currency, and vice-versa. For example, I could do this on eBay or a forum.
The large "exchanges" merely make this process more expedient. At the core of this concept is that people are willing to trade one good for another good, and in this case, it's Bitcoins for another currency.
The large "exchanges" merely make this process more expedient. At the core of this concept is that people are willing to trade one good for another good, and in this case, it's Bitcoins for another currency.