Minnesota banks to offer crypto custody from 2026

Minnesota will allow state banks and credit unions to offer crypto custody from August 2026, focusing on secure, segregated digital asset storage in a nonfiduciary role.

Minnesota has passed a law enabling state-chartered banks and credit unions to provide cryptocurrency custody services, effective August 1, 2026. Known as House File 3709 or Chapter 93, this legislation establishes a clear regulatory framework for these institutions to securely store, manage, and safeguard digital assets and private keys on behalf of customers. The law permits custody services in a nonfiduciary capacity, meaning banks and credit unions can hold digital assets without assuming full legal responsibility as trustees. To protect customers, the law requires that client assets be kept legally and operationally separate from the institution’s own funds, ensuring safety in the event of insolvency. This framework is intentionally limited to custody services and does not mandate institutions to offer them. Banks may use third-party subcustodians, and credit unions are included, though some interpretations suggest only banks are covered. The law aims to provide Minnesota residents with regulated alternatives to self-custody or unregulated providers, integrating digital asset management into traditional financial services.