Erebor, a financial services company backed by billionaire Peter Thiel, has secured conditional approval from U.S. regulators to operate as a national bank. This move positions Erebor as a potential rival to Silicon Valley Bank (SVB), which collapsed in 2023, and signifies a possible shift in Washington's stance toward crypto banking.
The Office of the Comptroller of the Currency (OCC) granted Erebor a preliminary banking charter, marking one of the most significant approvals for a digital asset-related bank since the 2023 regional banking crisis. The OCC stated that "permissible digital asset activities have a place in the federal banking system if conducted in a safe and sound manner". However, the charter remains conditional, and Erebor must undergo further compliance and security reviews before commencing operations, a process anticipated to take several months.
Erebor intends to cater to the "innovation economy," offering credit and financial services to companies in sectors like cryptocurrency, artificial intelligence, and advanced technology. A source familiar with the company stated their goal is to be "a stable, low-risk, reliable bank doing normal banking things without screwing everyone over with undue risk".
The company's founders include Peter Thiel, Palmer Luckey, and Joe Lonsdale. Investors include Thiel's Founders Fund and Haun Ventures. Erebor will operate as a digital-only bank, headquartered in Columbus, Ohio, with an additional office in New York City.
Erebor's emergence comes as startups and tech-focused businesses face tighter lending conditions following the failures of SVB, Silvergate Bank, Signature Bank, and First Republic Bank in 2023. These collapses disrupted funding for early-stage firms, particularly those in crypto and emerging technologies. Rising interest rates and risk aversion from traditional lenders have further limited access to credit, creating an opportunity for new entrants like Erebor.
The bank aims to replicate SVB's role as a key lender for startups and venture capital firms. Erebor plans to hold select cryptocurrencies on its balance sheet and serve payment providers, investment funds, trading firms, and registered broker-dealers.
The approval of Erebor's charter underscores the potential reopening of U.S. banking to fintech and digital asset players after a period of uncertainty. Erebor's conditional charter approval puts it ahead of companies like Ripple, which also has a pending application for a U.S. banking license.
While officials involved in the approval process assert that the review followed standard OCC procedures, the speed of the charter decision highlights a potentially more supportive stance toward fintech and blockchain banking in Washington. Current Comptroller Jonathan Gould emphasized that digital asset-related banking is permissible when conducted safely.
Erebor's focus on stablecoin transactions and credit solutions for underserved markets, combined with a conservative financial approach, positions it as a potential key player in the evolving financial landscape. The bank's launch reflects the resilience of the tech and crypto industries and the need for specialized financial institutions to support their growth.
