BlockBeats reports that on May 19, Minnesota Governor Tim Walz has officially signed HF 3709, allowing banks and credit unions in the state to provide cryptocurrency custody services. This bill will take effect on August 1, 2026.

According to the bill's requirements, financial institutions need to establish written policies covering risk management, internal controls, and security measures, and submit a written notice to the state commerce commissioner at least 60 days before launching custody services. The bill emphasizes that customer assets must be strictly segregated from the institution's own assets.

One of the main authors of the bill, Representative Bernie Perryman, stated that this move aims to allow local financial institutions to 'grow alongside their clients,' preventing residents from having to rely on unregulated out-of-state or offshore service providers. The Minnesota Credit Union Network claims this legislation provides residents with a 'safer way to manage crypto assets' and strengthens protections against risks like fraud and hacking through regulation.

As of now, Minnesota joins the ranks of New York, Wyoming, and Virginia as yet another state allowing banks to offer crypto custody services. At the same time, earlier this month, the state passed another bill (SF 3868) that bans crypto ATMs. Starting August 1, no new crypto ATMs can be installed, and existing machines must be removed by December 31. As a result, Bitcoin ATM operator Bitcoin Depot has filed for Chapter 11 bankruptcy protection and is initiating a business liquidation this Monday.