Minnesota Law Opens Crypto Custody To Banks, Credit Unions

Minnesota has granted state-chartered banks and credit unions legal authority to offer cryptocurrency custody services. Governor Tim Walz signed HF 3709, effective August 1, 2026. The law allows institutions to hold virtual currency and the cryptographic keys that control it for customers and members. Institutions must adopt written policies covering risk management, internal controls, and cybersecurity before offering custody. They must also provide written notice to the Minnesota Commissioner of Commerce at least 60 days in advance, including a description of their risk management program. The law requires strict segregation of client digital assets from institutional holdings. St. Cloud Financial Credit Union already offers CU-Digital Asset Vault™ and reported members safeguarding about 13.5 Bitcoin through the platform.

"Minnesota has become the latest state to grant banks and credit unions the legal authority to offer cryptocurrency custody services, a move that proponents say ends years of regulatory ambiguity that kept institutions on the sidelines of a market now worth trillions. Governor Tim Walz signed HF 3709 into law. The legislation takes effect August 1, 2026. The law permits state-chartered banks and credit unions to hold virtual currency and the cryptographic keys that control it on behalf of customers and members."

"According to the law, institutions seeking to offer custody services must adopt written policies covering risk management, internal controls, and cybersecurity before launching. They must also file written notice - including a description of their risk management program - with the Minnesota Commissioner of Commerce at least 60 days in advance. The law mandates strict segregation of client digital assets from an institution's own holdings, a standard requirement in traditional custody law extended to crypto."

"Rep. Bernie Perryman, a lead author of the bill, said the legislation ensures Minnesota financial institutions can "evolve alongside their customers and members," rather than forcing residents to turn to unregulated out-of-state or offshore providers. The Minnesota Credit Union Network said the law "gives Minnesotans a safer way to manage crypto" by routing digital asset activity through regulated institutions subject to established oversight."

"One institution was already operating. St. Cloud Financial Credit Union launched its CU-Digital Asset Vault™ in March- more than three months before the law's passage - making it the first credit union in Minnesota to offer members institutional-grade crypto custody. As of this month, St. Cloud Financial members are safeguarding approximately 13.5 Bitcoin through the platform, the union told Bitcoin Magazi."

Read at Bitcoin Magazine