Minnesota Governor Tim Walz has signed a crypto bill letting banks offer custody services while banning crypto kiosk machines statewide. Here’s what the law changes.
Minnesota Governor Tim Walz has signed a crypto bill letting banks offer custody services while banning crypto kiosk machines statewide. Here’s what the law changes.
Minnesota Governor Tim Walz has signed a crypto bill that allows banks and credit unions to offer cryptocurrency custody services while imposing a statewide ban on crypto kiosk machines, marking a dual regulatory approach that expands institutional access and restricts consumer-facing terminals.
WHAT TO KNOW
The legislation, signed by Governor Walz, contains two distinct regulatory moves. On one side, it opens the door for state-chartered banks and credit unions to provide custody services for digital assets, giving Minnesota residents a regulated path to hold crypto through traditional financial institutions.
On the other side, the law bans crypto kiosk machines across the state. These machines, often found in gas stations and convenience stores, have faced scrutiny for high fees and their use in fraud schemes targeting vulnerable consumers.
The bill moved through the Minnesota legislature as HF 3709 in the House and had a companion version in the Senate. The measure combines what are typically separate policy conversations, expanding crypto access through banks while cutting off a consumer-facing channel through kiosks, into a single piece of legislation.
The custody provision shifts crypto storage in Minnesota toward regulated institutions. Banks that choose to offer the service will operate under existing state banking oversight, providing depositors with a level of institutional accountability that standalone crypto platforms may not match. This echoes a broader trend of traditional finance integrating digital asset services.
The kiosk ban removes a point of access that served a different demographic. Crypto ATMs and kiosks have been popular among users who prefer cash-based transactions or lack traditional banking relationships. Minnesota’s decision to eliminate them entirely signals that the state views the consumer protection risks as outweighing the access benefits.
The contrast is notable: Minnesota is simultaneously making it easier to hold crypto through a bank and harder to buy it on the street. For residents, the practical effect depends on whether they have a banking relationship and whether their bank chooses to offer custody.
States have taken increasingly varied approaches to crypto regulation. Some have focused on licensing frameworks for exchanges, while others have targeted specific products or services. Minnesota’s bill is distinctive for packaging both an expansion and a restriction into one measure.
The custody component aligns with moves by other states to clarify that banks can legally hold digital assets on behalf of customers. The kiosk ban, however, puts Minnesota in a smaller group of states willing to eliminate a category of crypto access entirely, a step that may draw attention from consumer protection advocates and industry groups alike.
The law takes effect under Minnesota’s standard legislative timeline. Banks interested in offering custody services will need to develop internal compliance and operational frameworks before launching the service to customers.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
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