Minnesota signs law letting banks and credit unions offer crypto custody — effective August 2026!

Minnesota Governor Tim Walz signed HF 3709 into law on Friday, formally permitting state-chartered banks and credit unions to offer cryptocurrency custody services starting August 1, 2026. The legislation requires institutions to maintain written risk management policies, internal controls, and security frameworks — and to notify the Minnesota Commissioner of Commerce at least 60 days before launching any custody offering.

A key consumer protection embedded in the bill mandates strict segregation of client crypto assets from the institution's own holdings. Rep. Bernie Perryman, a lead author, framed the law as a way to let Minnesota financial institutions evolve alongside their customers rather than push residents toward unregulated out-of-state or offshore providers.

Minnesota now joins New York, Wyoming, and Virginia in extending regulated crypto custody rights to traditional…