Minnesota signed a new law allowing state-chartered banks and credit unions to offer crypto custody services from August 2026.
Crypto News
Minnesota Governor Tim Walz signed House File (HF) 3709 into law on May 16, giving state-chartered banks and credit unions the legal authority to offer virtual currency #custody services to clients. Those services can begin on Aug. 1, 2026.
The law permits custody only in a nonfiduciary capacity. Institutions may hire third-party subcustodians to carry out the work. Client funds must remain legally and operationally separated from the bank's or credit union's own assets at all times, and may not be treated as the institution's property.
State Representative Bernie Perryman, one of the bill's original sponsors, said in March 2026 that the legislation was designed to let Minnesota-based institutions keep pace with their clients. He said Minnesotans should not have to turn to unregulated or offshore providers for custody services.
Banks and Credit Unions Poised To Expand
As of May 2025, Minnesota hosted 240 commercially insured banks holding roughly $128 billion in combined assets. An additional 82 member-owned credit unions operate under the Minnesota Credit Union Network. U.S. Bancorp, the seventh-largest US bank by total assets, is headquartered in Minneapolis.
The custody law arrived alongside a separate piece of legislation. On May 5, Walz signed HF 3642, which bans digital asset kiosks and ATMs statewide. State representative Erin Koegel introduced that bill in February 2026 following a series of consumer scams involving crypto machines across the state.
At the federal level, crypto companies are pursuing national banking and custody approvals under the current administration. Payward, the parent company of crypto exchange Kraken, filed with the US Office of the Comptroller of the Currency (OCC) in May for a national trust company charter. The company said it plans to offer fiduciary custody and related digital asset services under the name Payward National Trust Company, subject to OCC approval. #banking
The OCC conditionally approved or fully approved similar applications from Ripple Labs, BitGo, Circle, Fidelity Digital Assets, and Paxos in December 2025. A separate charter application from World Liberty Financial, co-founded by US President Donald Trump and his sons, is also under review.
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