Sumitomo Mitsui Trust Holdings is planning to set up a trust company to manage digital assets for institutional investors, reported Bloomberg News.

The bank signed a Memorandum of Understanding (MoU) with Japanese crypto exchange operator bitbank to roll out custody services linked to public blockchain-based crypto assets, including non-fungible tokens (NFTs). 

Custodian services are considered to be vital for the institutional adoption of bitcoin and other crypto assets as investment asset classes.

While the crypto market in the US is driven by institutional investors, it continues to be dominated by retail investors in Japan, noted bitbank CEO Noriyuki Hirosue.

Hirosue said referring to the recent crypto asset theft in Japanese exchanges and overseas: “Given the past incidents, crypto companies do not enjoy public trust. We need cooperation of a major trust bank.”

The news comes as several large banks and financial services firms around the globe are making efforts to cater to the growing demand for digital assets among institutional and individual investors.

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Last week, Japanese investment bank Nomura revealed its plans to establish a new digital asset company to serve institutional clients and other investors.

Last October, Japan’s biggest brokerage and its joint venture Komainu partnered with Crypto Garage to explore offering digital asset custody services.

Other firms that are pushing to pushing to widen their presence in the digital asset space includes Goldman Sachs, Citigroup, and BNY Mellon.

Last year, BNY Mellon set up an enterprise Digital Assets unit to accelerate the development of enterprise solutions to serve the digital asset space.