On Friday, Governor Tim Walz signed House File (HF) 3709 into law, permitting “certain virtual-currency custody services to be offered and performed” by financial institutions in the US state.
One of the original sponsors in the Minnesota House of Representatives, Bernie Perryman, said in March that the bill was intended to ensure that “Minnesota-based financial institutions are allowed to evolve alongside their customers and members rather than forcing Minnesotans to rely on unregulated, out-of-state or offshore providers for services.” The new law authorizes banks and credit unions to provide virtual-currency custody services in a nonfiduciary capacity from Aug. 1
The law amended Minnesota’s statutes to allow the financial institutions to engage “third-party service providers or subcustodians to facilitate virtual-currency custody services,” provided the funds were “legally and operationally segregated” from the bank’s or credit union’s assets and not treated as its property. The crypto custody law could potentially affect operations at all the financial institutions in the state. The state’s government information portal shows that, as of May 2025, there were 240 commercial insured banks operating in Minnesota, with about $128 billion in assets, and 82 member-owned credit unions under the Minnesota Credit Union Network.
The country’s seventh-largest bank by total assets, U.S. Bancorp, is based in Minneapolis. Related: Bitcoin Depot stock crashes 71% premarket after Chapter 11 filing In addition to the crypto custody law, Minnesota lawmakers advanced a bill to ban digital asset kiosks and ATMs across the state in response to incidents of residents being scammed.