- Minnesota signed a law allowing banks to offer crypto custody
- Financial institutions must separate client and company assets
- The law takes effect on Aug. 1, 2026
- Minnesota also recently banned crypto ATMs statewide
New Crypto Custody Rules Approved
Minnesota Governor Tim Walz signed HF 3709 into law, officially allowing banks and credit unions to provide cryptocurrency custody services.
The legislation takes effect on Aug. 1, 2026, and establishes compliance standards for institutions entering the crypto custody market.
Strict Compliance Requirements
Banks and credit unions offering custody services must maintain written policies covering cybersecurity, internal controls, and risk management procedures.
Institutions are also required to notify the Minnesota Commissioner of Commerce at least 60 days before launching crypto custody services.
Customer Asset Protections Included
The law specifically requires firms to keep customer crypto assets segregated from company-owned assets, a safeguard designed to reduce risks during insolvency or operational failures.
Supporters of the legislation argued the move gives residents safer access to regulated crypto services instead of relying on offshore providers.
Minnesota Also Moves Against Crypto ATMs
Despite supporting custody services, Minnesota recently passed separate legislation banning crypto ATMs and kiosks statewide.
New crypto ATMs will be prohibited beginning Aug. 1, while all existing machines must be removed by Dec. 31.
