HF 3709
Introduction - 94th Legislature (2025 - 2026)
Posted on 03/05/2026 04:48 p.m.
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A bill for an act
relating to financial institutions; allowing certain virtual-currency custody services
to be offered and performed; proposing coding for new law in Minnesota Statutes,
chapters 48; 52.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
new text begin
[48.741] VIRTUAL-CURRENCY CUSTODY SERVICES.
new text end
new text begin Subdivision 1. new text end
new text begin Definitions. new text end
new text begin
(a) For purposes of this section, the following terms have
the meanings given.
new text end
new text begin
(b) "Control of virtual currency" has the meaning given in section 53B.69, subdivision
2.
new text end
new text begin
(c) "Virtual currency" has the meaning given in section 53B.69, subdivision 6.
new text end
new text begin
(d) "Virtual-currency custody services" means safekeeping, controlling, or managing
virtual currency, or the cryptographic private keys used to access virtual currency, on behalf
of another person.
new text end
new text begin Subd. 2. new text end
new text begin Authority. new text end
new text begin
A banking institution may provide virtual-currency custody services
in a fiduciary or nonfiduciary capacity, subject to this section and applicable state and federal
law.
new text end
new text begin Subd. 3. new text end
new text begin Safety and soundness. new text end
new text begin
A banking institution that engages in virtual-currency
custody services must conduct the activity in a safe and sound manner and must maintain
written policies and procedures governing risk management, internal controls, cybersecurity,
business continuity, and compliance.
new text end
new text begin Subd. 4. new text end
new text begin Notice to commissioner. new text end
new text begin
A banking institution must provide written notice to
the commissioner at least 60 days before commencing virtual-currency custody services.
The notice must describe the nature of the services and the banking institution's risk
management framework.
new text end
new text begin Subd. 5. new text end
new text begin Fiduciary capacity. new text end
new text begin
(a) A banking institution may provide virtual-currency
custody services in a fiduciary or custodial capacity, including as agent, bailee, or trustee
for the limited purpose of safekeeping or administration of virtual currency, to the same
extent the banking institution may lawfully hold or safeguard other assets for customers.
new text end
new text begin
(b) The commissioner may limit or condition the authority to provide virtual-currency
custody services under paragraph (a) only if the commissioner determines the activity is
conducted in an unsafe or unsound manner.
new text end
new text begin Subd. 6. new text end
new text begin Segregation of assets. new text end
new text begin
A banking institution must structure virtual-currency
custody services to ensure that customer virtual currency and associated control mechanisms
are legally and operationally segregated from the banking institution's assets and are not
treated as the banking institution's property, consistent with the segregation of assets held
in other custodial or fiduciary capacities and the concept of control of controllable electronic
records under sections 336.12-101 to 336.12-107.
new text end
new text begin Subd. 7. new text end
new text begin Third-party service providers. new text end
new text begin
A banking institution may engage one or more
qualified third-party service providers or subcustodians to facilitate virtual-currency custody
services, provided the banking institution retains oversight responsibility and ensures
compliance with this section.
new text end
new text begin Subd. 8. new text end
new text begin Supervision and examination. new text end
new text begin
A banking institution's virtual-currency custody
services are subject to examination by the commissioner as part of the regular supervisory
process.
new text end
new text begin Subd. 9. new text end
new text begin Construction. new text end
new text begin
This section does not (1) authorize a banking institution to
engage in activities otherwise prohibited by law, or (2) alter the legal characterization of
virtual currency under state or federal law.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective August 1, 2026, and applies to
virtual-currency custody services commenced on or after that date.
new text end
Sec. 2.
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[52.25] VIRTUAL-CURRENCY CUSTODY SERVICES.
new text end
new text begin Subdivision 1. new text end
new text begin Definitions. new text end
new text begin
(a) For purposes of this section, the following terms have
the meanings given.
new text end
new text begin
(b) "Control of virtual currency" or "control" has the meaning given in section 53B.69,
subdivision 2.
new text end
new text begin
(c) "Virtual currency" has the meaning given in section 53B.69, subdivision 6.
new text end
new text begin
(d) "Virtual-currency custody services" means safekeeping, controlling, or managing
virtual currency, or the cryptographic private keys used to access virtual currency, on behalf
of another person.
new text end
new text begin Subd. 2. new text end
new text begin Authority. new text end
new text begin
A credit union may provide virtual-currency custody services to
the credit union's members in a fiduciary or nonfiduciary capacity, subject to this section
and applicable state and federal law.
new text end
new text begin Subd. 3. new text end
new text begin Safety and soundness. new text end
new text begin
A credit union that engages in virtual-currency custody
services must conduct the activity in a safe and sound manner and must maintain written
policies and procedures governing risk management, internal controls, cybersecurity, business
continuity, and compliance.
new text end
new text begin Subd. 4. new text end
new text begin Notice to commissioner. new text end
new text begin
A credit union must provide written notice to the
commissioner at least 60 days before commencing virtual-currency custody services. The
notice must describe the nature of the services and the credit union's risk management
framework.
new text end
new text begin Subd. 5. new text end
new text begin Fiduciary capacity. new text end
new text begin
(a) A credit union may provide virtual-currency custody
services in a fiduciary or custodial capacity, including as agent, bailee, or trustee for the
limited purpose of safekeeping or administration of virtual currency, to the same extent the
credit union may lawfully hold or safeguard other assets for members or customers.
new text end
new text begin
(b) The commissioner may limit or condition the authority to provide virtual-currency
custody services under paragraph (a) only if the commissioner determines the activity is
conducted in an unsafe or unsound manner.
new text end
new text begin Subd. 6. new text end
new text begin Segregation of assets. new text end
new text begin
A credit union must structure virtual-currency custody
services to ensure that customer virtual currency and associated control mechanisms are
legally and operationally segregated from the credit union's assets and are not treated as the
credit union's property, consistent with the segregation of assets held in other custodial or
fiduciary capacities and the concept of control of controllable electronic records under
sections 336.12-101 to 336.12-107.
new text end
new text begin Subd. 7. new text end
new text begin Third-party service providers. new text end
new text begin
A credit union may engage one or more
qualified third-party service providers or subcustodians to facilitate virtual-currency custody
services, provided the credit union retains oversight responsibility and ensures compliance
with this section.
new text end
new text begin Subd. 8. new text end
new text begin Supervision and examination. new text end
new text begin
A credit union's virtual-currency custody
services are subject to examination by the commissioner as part of the regular supervisory
process.
new text end
new text begin Subd. 9. new text end
new text begin Construction. new text end
new text begin
This section does not (1) authorize a credit union to engage in
activities otherwise prohibited by law, or (2) alter the legal characterization of virtual
currency under state or federal law.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective August 1, 2026, and applies to
virtual-currency custody services commenced on or after that date.
new text end