House Bill 1029, which grants state-chartered banks and credit unions authority to offer digital asset services, passed the House with bipartisan backing during last week's legislative session, according to NewsData.io.
The bill represents a shift in how states approach crypto custody and trading. Rather than leaving digital assets in a regulatory grey zone, HB 1029 explicitly permits state-chartered institutions to hold, custody, and facilitate transactions in cryptocurrencies and other digital assets under state banking law.
State-level authorization matters because federal banking agencies have long treated crypto services as high-risk compliance work, steering most traditional banks away from the sector. A state charter removes that federal friction for qualifying institutions. Credit unions, which operate under a separate federal framework, gain similar latitude under this bill.
The mechanics: state-chartered banks and credit unions would operate within existing state regulatory oversight rather than seeking new federal licensing. This approach lets smaller or regional institutions compete directly with crypto-native custodians and trading venues without navigating the full federal banking application process.
No federal sign-off is required for the bill to take effect once signed into law. States retain control over banking chartering and supervision, so this legislation sidesteps the need for OCC or Federal Reserve approval on a case-by-case basis.
The breadth of bipartisan support signals neither party views crypto-banking integration as a poison issue, though tensions remain around stablecoin regulation and consumer protection standards. The bill does not address federal stablecoin rules, leaving that fight to Congress and banking regulators.
Next step: the bill heads to the Senate. If it clears that chamber and reaches the governor's desk, state banks and credit unions could begin building digital asset infrastructure within months. The exact implementation timeline depends on how quickly state banking regulators draft operational rules around custody, settlement, and capital requirements.