Key Highlights
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Minnesota Governor Tim Walz signed HF 3709 into law, making Minnesota the first Midwest state to authorize banks and credit unions to offer crypto custody services.
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Starting August 1, over 240 state-chartered banks and 82 credit unions will be eligible to hold digital assets on behalf of clients, subject to a 60-day advance notice requirement.
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The same legislation includes a statewide ban on crypto ATMs, balancing expanded institutional access with stricter consumer protections.
Minnesota has become the latest U.S. state to open its financial system to digital assets. Governor Tim Walz signed HF 3709 into law, granting state-chartered banks and credit unions the legal authority to provide cryptocurrency custody services to their clients beginning August 1, 2026.
The new law positions Minnesota as the first Midwest state to take this step, joining a growing list of jurisdictions that are integrating crypto custody into their traditional banking frameworks. With more than 240 state-chartered banks and 82 credit unions now eligible, a significant portion of the state's financial institutions could enter the digital asset space in the coming months.
Institutions choosing to offer these services must provide a 60-day advance notice to regulators before launching, ensuring oversight bodies have time to review readiness. The custody framework covers a range of digital assets, including Bitcoin and other cryptocurrencies held in client accounts.
Notably, HF 3709 also includes a statewide ban on cryptocurrency ATMs, a measure aimed at curbing fraud that has disproportionately affected vulnerable populations. The dual approach reflects a broader legislative philosophy of expanding access through regulated institutions while clamping down on unmonitored retail crypto access points.
