Minnesota Signs Crypto Custody Law For Banks And Credit Unions

Minnesota has approved a crypto custody law that lets state-chartered banks and credit unions hold digital assets for customers under state oversight.

Good to Know

• HF 3709 takes effect on Aug. 1, 2026.
• Banks and credit unions must notify the Minnesota Commissioner of Commerce 60 days before launch.
• Minnesota will also ban crypto ATMs from Aug. 1, 2026.

Gov. Tim Walz signed HF 3709 into law, giving banks and credit unions a clear path to safeguard virtual currency and private keys for customers. The law covers safekeeping, control and management of digital assets on behalf of another person.

Minnesota Splits Bank Custody From Crypto ATM Risk

Under the new rules, banks may offer custody in a fiduciary or nonfiduciary role. Credit unions may provide the service to members, but only within state and federal limits.

Any institution offering crypto custody must act in a safe and sound manner. Written policies must cover risk management, internal controls, cybersecurity, business continuity and compliance.

Customer crypto must also stay separate from bank or credit union assets. Institutions may use qualified third-party providers or subcustodians, but oversight remains their responsibility.

Rep. Bernie Perryman, one of the bill authors, said HF 3709 would allow Minnesota financial institutions to “evolve alongside their customers and members” rather than send residents to out-of-state or offshore providers.

Minnesota is also taking a tougher line on crypto ATMs. Walz signed SF 3868 on May 5, banning virtual currency kiosks statewide from Aug. 1, 2026. Operators must remove public kiosks by Dec. 31, 2026.

The ban covers installation, operation, maintenance and public use of crypto kiosks. Operators must return customer funds before closing, either in U.S. dollars based on market value or as crypto sent to a wallet selected by the customer.

The Minnesota Credit Union Network said the custody law gives residents “a safer way to manage crypto” through regulated institutions.

The timing also fits wider U.S. banking policy. Federal banking guidance has become clearer for digital asset services, with the OCC allowing regulated banks to buy, sell and custody crypto held for customers.