Minnesota becomes first Midwestern state to let local banks offer crypto custody — taking the fight to Wall Street!

Minnesota has enacted a first-of-its-kind Midwestern law authorizing state-chartered banks and credit unions to offer cryptocurrency custody services, with the legislation signed by Governor Tim Walz and set to take effect August 1, 2026. The move is a direct response to deposit flight — dollars leaving local institutions for out-of-state crypto exchanges and platforms, reducing capital available for small business lending, mortgages, and community reinvestment.

Rep. Bernie Perryman, who authored the bill, framed the law as a competitive necessity: Wall Street firms are aggressively building out digital asset infrastructure around stablecoins, tokenization, and custody, and community institutions risk irrelevance if they stay on the sidelines.