In a major move that combines fintech invention with venture-funded aspiration, a group of tech billionaire backers are launching a new U.S. digital bank called Erebor, squarely targeted at the startup world left adrift following the rise and fall of Silicon Valley Bank (SVB).
American defense technology company Anduril's co-founder Palmer Luckey is leading the effort with support from Founders Fund, which is connected to tech investor Peter Thiel, as well as Joe Lonsdale, the co-founder of Palantir, who is a prominent political donor. Their aim is to build a secure, innovation-oriented banking technology infrastructure that would support high-risk industries like crypto, artificial intelligence, defense, and new manufacturing fields.
The company wrote in its application for a national bank charter that Erebor would exist as a fully digital bank with its home base in Columbus, Ohio, and a second office in New York. The bank will serve not just tech businesses but individuals who work or invest in those sectors—addressing the financial vacuum that SVB's abrupt cash crunch left in March 2023.
Erebor is led by co-CEOs Owen Rapaport and Jacob Hirshman, who was an advisor to stablecoin issuer Circle. Their vision encompasses a regulated system that would make Erebor the most compliant institution when it comes to stablecoin transactions. The bank will even keep stablecoins on its balance sheet, an unusual step in traditional banking.
Stablecoins, which are tied to traditional currencies such as the U.S. dollar, are gaining traction among banks and fintech outfits for facilitating faster cross-border payments, streamlining settlements, and providing more access to digital finance.
SVB had at one time been the financial backbone of the earliest-stage startups, but quickly, it and the venture capitalists with whom it worked found themselves scrambling after the bank collapsed. With the arrival of Erebor comes a new financial support system for tech-driven firms that traditional banks still consider too risky.
Although Luckey and Lonsdale won't be running Erebor day-to-day, their backing shows serious intentions to change around banking for the tech economy. With a commitment to secure digital finance, regulated crypto operations, and AI-driven innovation, Erebor could be a blueprint for the next generation of tech-first banking.
