Minnesota Banks Authorized to Provide Crypto-Asset Custody Services

A law has been passed in the U.S. state of Minnesota allowing banks and credit unions to provide cryptocurrency custody services. House File 3709, signed by Governor Tim Walz, enables financial institutions to perform virtual asset custody operations starting August 1. This was reported by Cointelegraph.com reporting states.

Bernie Perryman, one of the bill's sponsors, noted that this change will help local financial institutions adapt to customer demand and eliminate the need for them to use unregulated foreign platforms. Banks may hold crypto-assets using third-party providers, but these funds must be strictly segregated from the bank's own assets.

There are 240 commercial banks and 82 credit unions operating in Minnesota, with significant total assets. Major financial institutions such as U.S. Bancorp, based in the state capital of Minneapolis, are expected to utilize this new regulation.

At the same time, the state government is strengthening security measures. The governor recently signed a law banning cryptocurrency kiosks in the state due to an increase in fraud cases. These steps are aimed at ensuring that working with crypto-assets in the financial sector is more transparent and regulated.