Minnesota Crypto Custody Law Allows Banks and Credit Unions to Hold Digital Assets

Minnesota has approved a new law allowing banks and credit unions to provide crypto custody services, marking another step in the state’s changing approach to digital assets. Governor Tim Walz signed HF 3709 into law on May 16, and the legislation will officially take effect on August 1, 2026.

Minnesota Crypto Custody Rules for Banks and Credit Unions

Under the new law, financial institutions in Minnesota can legally store and manage cryptocurrencies on behalf of customers. However, banks and credit unions must follow strict rules before offering these services.

Institutions are required to create written policies covering risk management, cybersecurity, internal controls, and customer asset protection. They must also notify the Minnesota Commissioner of Commerce at least 60 days before launching crypto custody services and explain how risks will be handled.

A major requirement of the law is the separation of customer crypto holdings from institutional assets to improve safety and reduce risks during financial trouble.

Minnesota Expands Crypto Regulation While Banning Crypto ATMs

Minnesota lawmakers say the measure gives residents safer options instead of relying on offshore or unregulated providers. At the same time, the state recently passed another law banning crypto ATMs and kiosks. Starting August 1, no new machines can operate, while existing kiosks must be removed by December 31, 2026.

Minnesota now joins states like New York, Wyoming, and Virginia in allowing regulated crypto custody services.