Minnesota Governor Tim Walz signed HF 3709 into law on May 20, granting state-chartered banks and credit unions explicit legal authority to offer cryptocurrency custody services. The law, effective August 1, 2026, resolves what industry participants called a regulatory gray zone and puts Minnesota in a small group of states — New York, Wyoming, and Virginia — that have established similar frameworks.
Custody rules and 60-day notice
Under the new law, institutions must adopt written policies covering risk management, internal controls, and cybersecurity before they can launch custody services. They also have to file written notice with the Minnesota Commissioner of Commerce at least 60 days in advance, including a description of their risk management program. The law mandates strict segregation of client digital assets from the institution’s own holdings — meaning customer crypto can’t be commingled with bank assets or used for proprietary trading.
Credit union’s CU-Digital Asset Vault
St. Cloud Financial Credit Union didn’t wait for the ink to dry. It launched its CU-Digital Asset Vault in March 2026, making it the first credit union in Minnesota to offer institutional-grade crypto custody. As of publication, members safeguard roughly 13.5 Bitcoin through the platform.
The vault runs on Coin2Core, an infrastructure product built by DaLand CUSO, a credit union-owned technology cooperative. The model is collaborative safekeeping — no single party holds independent control over a member’s assets. Chase Larson, an executive at St. Cloud Financial, said the law resolves a regulatory gray zone and changes the liability posture for institutions. Before the law, offering such services carried legal uncertainty that chilled adoption.
Longer-term roadmap and the June 2 deadline
St. Cloud Financial’s longer-term roadmap, dubbed R-Path, envisions expanding into blockchain-enabled payments, real-time settlement, stablecoin frameworks, and other digital financial services. That’s a few years out, but the custody offering is live now.
For other institutions that want to offer custody by the August 1 effective date, the clock is ticking. They must submit their 60-day notice to the Commerce Commissioner no later than June 2. Rep. Bernie Perryman is a lead author of the bill.
