Why Minnesota is empowering local banks to fight Wall Street for crypto revenue
Key takeaways
- Bernadette "Bernie" Perryman, explained that she co-authored the bill for crypto services to shield the state's economy from further capital flight.
- “Over the last several years, I’ve consistently heard concerns about the increasing amount of deposit flight from local financial institutions to crypto exchanges and digital asset platforms,” said Rep.
- From the state’s bankers’ perspective, the issue is also about remaining competitive, Meggan Schwirtz, chief experience officer at St.
A local banker told Coin Desk that in light of Wall Street’s aggressive push into the crypto industry, Minnesota's financial institutions could not afford to remain on the sidelines.By Olivier Acuna|Edited by Aoyon Ashraf May 22, 2026, 5:53 p.m. 3 min read Make preferred on Minnesottan lawmaker, Rep. Bernadette "Bernie" Perryman, explained that she co-authored the bill for crypto services to shield the state's economy from further capital flight. (Bernadette "Bernie" Perryman)What to know: Minnesota has enacted a first-of-its-kind Midwestern law allowing state-chartered banks and credit unions to offer cryptocurrency custody services, aiming to stem deposit flight to out-of-state crypto platforms.Lawmakers and local bankers say the measure is needed to keep community institutions competitive as Wall Street accelerates its push into digital asset infrastructure, stablecoins and tokenization.The law, which takes effect Aug. 1, 2026, comes alongside a statewide ban on crypto ATMs and kiosks and will require institutions offering custody to meet strict federal compliance standards without the protection of federal deposit insurance.Minnesota financial institutions can no longer afford to remain on the sidelines as Wall Street aggressively captures digital asset infrastructure, driving a state-level legislative push to halt deposit flight and insulate the local economy, a local legislator and a banker told CoinDesk.
“Over the last several years, I’ve consistently heard concerns about the increasing amount of deposit flight from local financial institutions to crypto exchanges and digital asset platforms,” said Rep. Bernadette “Bernie” Perryman (R-St. Augusta).
The lawmaker, who authored the bill recently enacted by Governor Tim Walz, paving the runway for state banks and credit unions to provide crypto custody service, explained that deposit flight has created significant challenges for Minnesota.