Minnesota Clears Banks to Offer Crypto Custody Starting Aug. 1, 2026

Minnesota has passed a new law authorizing banks and credit unions to provide certain digital-asset custody services, after Governor Tim Walz signed House File 3709 (HF 3709). The bill was delivered to the governor on May 12, 2026, and is set to take effect on Aug. 1, 2026. Under the new statute, Minnesota-chartered banks and credit unions may hold cryptocurrency on behalf of customers in a custody role similar to safeguarding cash or important documents. The law also permits institutions to control customers' private keys—credentials needed to access crypto wallets—provided they give the state commissioner at least 60 days' notice before launching the service. HF 3709 requires any credit union offering virtual-currency custody to operate in a safe and sound manner and to maintain written policies and procedures covering risk management, internal controls, cybersecurity, business continuity, and compliance. Customer crypto must be segregated from the institution's own assets, preserving customers' legal ownership even if the bank faces financial distress. Institutions may partner with third-party crypto custodians, but they remain subject to regulatory supervision. State regulators will conduct routine examinations and oversee custody operations. In March, Representative Bernie Perryman said HF 3709 is intended to allow Minnesota-based financial institutions to keep pace with customer demand rather than pushing residents toward unregulated, out-of-state, or offshore providers. The measure could affect a broad swath of the state's financial sector. Minnesota data show that as of May 2025 the Minnesota Credit Union Network included 82 member-owned credit unions, and the state had 240 commercially insured banks with roughly $128 billion in assets. Minnesota joins states such as New York, Wyoming, and Virginia that have enacted similar frameworks for bank-provided crypto custody. At the same time, the state is moving to restrict cryptocurrency ATMs and kiosks. Walz also signed Senate File 3868 (SF 3868), a bipartisan bill that would ban ATMs statewide beginning Aug. 1. Final Summary: Walz signed HF 3709, enabling crypto custody services by banks and credit unions starting Aug. 1, 2026. Minnesota aligns with New York, Wyoming, and Virginia on similar legislation.