Journal of Legal Research

Journal of Legal Research

Regulatory Frameworks and Legal Implications of Cryptocurrency Exchange Integration with Financial Institutions: Strategies for Virtual Banking Services

Document Type : Original Article

Authors
Zahra Asef Kabiri 1
Mostafa Elsan 2
Amir Abbas Bozorgmehr 1
Mojtaba Asgharian 3
1 Department of Private Law, NT.C., Islamic Azad University, Tehran, Iran.
2 Associate Professor, Department of International Trade Law and Intellectual Property Law and Cyberspace, Faculty of Law, Shahid Beheshti University, Tehran, Iran.
3 Assistant Professor, Department of International Law, Faculty of Law and Political Science, Kharazmi University, Tehran, Iran.
10.48300/jlr.2025.512645.2900
Abstract
Financial technology is evolving toward a model that enables individuals worldwide to use virtual currencies for transactions. New virtual currency intermediaries, namely cryptocurrency exchanges, provide online storage facilities and platforms for the purchase, sale, and transfer of such assets. The participation of these emerging financial technology providers in payment systems may bring fundamental changes to the global financial ecosystem. Nevertheless, these intermediaries are not without challenges. Financial institutions are increasingly motivated to integrate with cryptocurrency exchanges due to their potential advantages, including rapid cross-border payments and low-cost settlement mechanisms. This study, employing a descriptive-analytical method based on library research, examines the legal dimensions of financial integration with cryptocurrency exchanges and the mechanisms required to manage such integration while preserving innovation and avoiding unnecessary restrictions on these emerging actors. It further seeks to identify an effective supervisory authority capable of managing the potential risks arising from such integration and, by examining the models adopted by virtual banks that incorporate cryptocurrencies into their digital banking services, explores the possibility of providing users with a new form of cryptocurrency-based financial experience. The findings demonstrate that despite national, regional, and international regulatory initiatives concerning virtual currencies, a unified regulatory framework has not yet been established at either the national or global level. Although the Markets in Crypto-Assets Regulation (MiCA) has significantly transformed the regulatory landscape of crypto-asset markets within the European Union, important segments of the cryptocurrency ecosystem remain outside its scope.
Keywords
Cryptocurrency Exchange
Financial Integration
Self-Regulatory Organization
International Supervisory Authority
MiCA
Virtual Bank
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Journal of Legal Research
Volume 25, Issue 66
Summer 2026
Pages 307-339