Minnesota’s Crypto Crossroads: Banks Gain Custody Rights as ATMs Face Ban

Minnesota has enacted landmark legislation authorizing state-chartered banks and credit unions to provide cryptocurrency custody services, while simultaneously imposing a complete ban on crypto ATMs. The move creates the Midwest's first regulatory framework for digital asset banking services.

Local financial institutions have been hemorrhaging deposits to crypto exchanges in recent years, according to State Legislator Bernie Perryman. 'We've seen capital that could have fueled regional growth—mortgage lending, community projects—flowing out of state instead,' Perryman noted during floor debates.

St. Cloud Financial Credit Union CEO Meggan Schwirtz observes the shift isn't merely reactive: 'Digital asset capabilities are becoming table stakes for financial services competitiveness.' The legislation positions Minnesota as an unexpected laboratory for balancing innovation with consumer protection.