Minnesota Law Allows State Banks to Custody Bitcoin
- Minnesota Gov. Tim Walz signed HF 3709, allowing state-chartered banks to offer Bitcoin and crypto custody services starting August 1, 2026.
- The law mandates a prior notice of at least 60 days to the Minnesota Department of Commerce before launching these services.
- Approximately 20% of St. Cloud Financial Credit Union members already hold virtual currency, indicating strong local demand for regulated custody options.
- The legislation prohibits banks from trading, investing, or lending digital assets and requires them to maintain strict risk management and cybersecurity policies.
- A separate measure bans virtual-currency kiosks statewide by August, targeting fraud prevention.
Minnesota’s new law enables state-chartered banks to provide regulated custody services for crypto, addressing local demand and aligning with federal guidance on digital asset safekeeping. The move reflects a strategic approach to enhance consumer protection while removing high-risk channels like crypto kiosks.
These legislative changes aim to ensure that Minnesota financial institutions can evolve with customer needs without relying on external providers for crypto services, as evidenced by the significant interest from credit union members in holding digital assets locally. (Source)
