St. Cloud Lawmaker Authors Bill to Regulate Cryptocurrency Management at Banks

(KNSI) — St. Cloud area Representative Bernie Perryman has authored a bill to address how banks can safely manage digital currencies, like cryptocurrency, for customers and investors.

The Virtual Currency Custody Services bill allows banks to offer services to store and protect virtual currency, such as Bitcoin, ensuring it is handled securely and in compliance with state and federal law.

St. Cloud Financial Credit Union, in a press release, says it has been working with Minnesota lawmakers for several years to help shape responsible digital asset policy. “Minnesota residents should care because this is about keeping wealth locally and keeping our institutions in the game,” SCFCU Executive Vice President and Chief Lending Officer Chase Larson said.

“The world is moving toward digital assets and new forms of money, but at its core, this is simply about safeguarding member assets and data in a trusted environment. “This is a step in the right direction to allow members’ local, trusted financial institution to serve them and to provide safe keeping in this new world of digital assets,” Larson added.

The bill sets clear rules for banks to follow, including providing notice before launching these services, maintaining strong security measures, and separating virtual currency from the bank’s own assets. It also lets banks work with third-party providers to manage these services, but only if they maintain oversight and meet regulatory standards.

“Many digital asset platforms operate without direct customer support or local accountability,” Larson continued, adding it’s important for digital assets to be held at a local institution that follows the same established processes used for traditional assets, “like a safety deposit box when somebody passes away.”

Proponents say cryptocurrency investors and digital asset holders will benefit from clearer regulations and stronger consumer protections. If the bill gets signed into law, it will require financial institutions to work with the Department of Commerce for regulatory oversight and consumer accountability.

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