ST. PAUL, Minn. — Minnesota banks and credit unions will be permitted to offer certain cryptocurrency custody services beginning Aug. 1 under legislation signed into law by Gov. Tim Walz, a move supporters said will allow state-chartered financial institutions to compete with emerging digital-asset providers.
Under House File 3709, Minnesota state-chartered banks and credit unions will be authorized to provide virtual-currency custody services in a nonfiduciary capacity beginning Aug. 1, according to reporting by Cointelegraph and bill summaries published by the Minnesota House of Representatives.
The law requires financial institutions to provide written notice to the Minnesota Department of Commerce at least 60 days before launching cryptocurrency custody services and to establish written policies and procedures governing the business, according to the Minnesota House of Representatives.
The law will permit banks and credit unions to use third-party service providers or subcustodians, provided customer digital assets are legally and operationally segregated from the institution’s own assets and are not treated as institutional property, Cointelegrph stated.
What Supporters Say
Supporters of the measure said the legislation responds to growing consumer demand for regulated digital-asset services from traditional financial institutions. According to the Minnesota House of Representatives, bill sponsor Rep. Bernie Perryman said during committee debate that consumers increasingly want the ability to safeguard cryptocurrency assets through financial institutions they already trust.
Earlier this year, supporters argued the law would help reduce consumer reliance on offshore or lightly regulated cryptocurrency firms that may fall outside Minnesota oversight, Constitutions Daily reported.
Cointelegraph stated the legislation could affect a sizable portion of Minnesota’s financial system, noting the state had approximately 240 commercial insured banks with roughly $128 billion in assets and 82 member-owned credit unions as of 2025.
The Minnesota Credit Union Network and St. Cloud Financial Credit Union praised the measure in public statements and social media posts, saying the law would provide Minnesotans with a safer and more regulated option for safeguarding digital assets while strengthening protections against fraud, hacking and asset loss.
As the CU Daily reported here, St. Cloud Financial Credit Union is reporting it has surpassed 10 Bitcoin safeguarded in its new CU-Digital Asset Vault, a milestone it noted it hit within the first weeks of availability to members. It has partnered with DaLand CUSO on the offering.
Kiosks are Banned
The legislation comes as Minnesota also moves to restrict other parts of the cryptocurrency market. Reporting by KFGO, KSTP and legal analysis published by JD Supra said Walz recently signed separate legislation banning cryptocurrency kiosks and ATMs statewide later this year because of concerns over fraud and scams.
