Why Minnesota is empowering local banks to fight Wall Street for crypto revenue
Minnesota has enacted legislation allowing state banks and credit unions to offer crypto custody services to prevent deposit flight to digital asset platforms.Summary
Minnesota has become the first Midwestern state to pass legislation authorizing state-chartered banks and credit unions to provide cryptocurrency custody services. Championed by Rep. Bernadette Perryman and signed by Governor Tim Walz, the law aims to mitigate "deposit flight" to external crypto exchanges, ensuring that capital remains available for local reinvestment. Industry leaders emphasize that this move is essential for the commercial relevance of local institutions as Wall Street firms aggressively adopt digital asset infrastructure. While the law marks a significant milestone, institutions must still navigate complex federal compliance requirements, including anti-money laundering and KYC protocols, while utilizing private insurance solutions as digital assets remain outside the scope of federal FDIC or NCUA insurance.
(Source：CoinDesk)