TL;DR
-
Tim Walz signed HF 3709, letting state chartered banks and credit unions in Minnesota custody crypto for their customers
-
Banks can act as fiduciary and non-fiduciary custodians, opening the door for crypto in trusts, estates and retirement accounts
-
While the CLARITY Act moves through Congress, states are taking crypto custody into their own hands, one by one
Former vice president candidate and current governor of Minnesota, Tim Walz just signed HF 3709 into state law. It will allow state chartered banks and credit unions to custody crypto for its customers, in the state of Minnesota. The law takes effect on August 1st, 2026.
While the CLARITY Act keeps moving through Congress, states are taking the matter of crypto custody into their own hands.
What this bill does is allow banks to be both fiduciary and non-fiduciary and credit unions to be non-fiduciary only custodians of crypto on behalf of their customers. Being a fiduciary custodian means digital assets can now be considered by for example trust, estates and retirement accounts. The 240 banks and 82 credit unions of Minnesota have around $128 billion in assets.
Minnesota isn't the first
Minnesota is not the first state with regulation like this. Wyoming, Virginia, Nebraska and Texas all have their own version. And, meanwhile, the federal agency OCC has once again opened the door for crypto companies to get bank charters. Just this year, twelve new charters have been issued to crypto companies. This allows even more crypto to be custodied by actual banks.
The act is a response to what Minnesotans want, Bernie Perryman:
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.
Rather than forcing them to hold their assets out of state, they’ll now be able to do it safely and regulated, within Minnesota. And the numbers speak for themselves, for example, according to St. Cloud Financial Credit Union, 20% of their customers already own crypto.
So, while the CLARITY Act is on its way, crypto is already being integrated into traditional banks and finance, state by state.
