Minnesota Legalizes Crypto Custody Services for Banks and Credit Unions

As demand for cryptocurrency holdings grows, digital asset custody is emerging as a new business for financial institutions. Minnesota advanced HF 3709 to allow banks and credit unions in the state to safeguard customer assets under a regulatory framework, helping them compete with major Wall Street institutions while reducing residents’ reliance on unregulated or offshore providers.

Minnesota Governor Tim Walz has signed HF 3709, formally authorizing banks and credit unions in the state to offer digital asset custody services from August 1. The law does not specify the size of the relevant market, but it establishes a legal basis for local financial institutions to enter the crypto custody business in response to customer demand and asset-security concerns.