Minnesota Greenlights Crypto Custody by Banks and Credit Unions, Rules Take Effect Aug. 1

Governor Tim Walz signed HF 3709 into law on Friday (May 15), allowing banks and credit unions in Minnesota to offer cryptocurrency custody services, with rules taking effect Aug. 1, 2026, according to Minnesota House of Representatives.

Financial institutions must establish written policies addressing risk management, cybersecurity, and internal controls before launching custody services. They are required to notify the Minnesota Commissioner of Commerce at least 60 days in advance and provide details on risk management frameworks. Critically, customer crypto assets must remain fully segregated from the institution's own holdings to mitigate insolvency and operational risks.