Minnesota Banks and Credit Unions Get Green Light for Crypto Custody Services

The Minnesota state legislature has approved a bill that will enable state-chartered banks and credit unions to provide cryptocurrency custody services. This move aims to help local financial institutions remain competitive in the growing digital asset market.

Under the new law, banks can offer custody services directly to customers in both fiduciary and non-fiduciary capacities, while credit unions are limited to non-fiduciary services only. Institutions may also use third-party sub-custodians, as long as customer assets remain segregated from their own balance sheet.

The legislation requires financial institutions to provide 60 days' written notice to the state's commerce commissioner before launching custody operations, including details on cybersecurity measures and compliance procedures.