Panel OKs allowing banks, credit unions to offer cryptocurrency accounts

Banks and credit unions play a critical role in a community as financial institutions that residents can trust.

As cryptocurrency becomes more mainstream, Minnesotans are already asking if they can work with someone they trust at their financial institution to help safeguard their assets and do so under state law and oversight, said Rep. Bernie Perryman (R-St. Augusta).

To that end, she sponsors HF3709 to allow a bank or credit union to provide custodial accounts for virtual currency. It would require the financial institution to maintain written policies and procedures and provide written notice to the Department of Commerce before it commences offering such services.

Rep. Bernie Perryman

“House File 3709 is about ensuring that Minnesota-based financial institutions are allowed to evolve alongside their customers and members rather than forcing Minnesotans to rely on unregulated, out-of-state or offshore providers for services that are already in use today,” Perryman said.

The House Commerce Finance and Policy Committee sent the bill to the House Floor via a voice vote Tuesday.

[READ: Minnesota Credit Union Network letter]

Rep. Steve Elkins (DFL-Bloomington) said the bill is about “choice, consumer protection and competitiveness” and would allow Minnesotans to have “innovation without sacrificing trust.”

An average of 20% of the St. Cloud Financial Credit Union’s members own virtual currency and have no one to help them if they have questions, said Chase Larson, executive vice president and chief lending officer at the credit union.

“The bill in front of you today is not about cryptocurrency hype. It’s about consumer protection and ensuring that our local financial institutions and local credit unions remain relevant,” Larson said.

Sam Smith, government relations director at the Department of Commerce, spoke in support of the bill, saying it “levels the playing field and allows Minnesotans to safely keep their virtual currencies with a trusted community partner like a credit union or bank.”

No one testified in opposition.