Erebor Bank, a crypto-friendly financial startup, has become the first new national bank chartered in the United States during President Donald Trump's second term. The Office of the Comptroller of the Currency (OCC) granted the charter less than eight months after the application was filed, signaling a swift and potentially "innovation-friendly" regulatory shift under the current administration.
The bank is backed by prominent tech investors, including Palmer Luckey (founder of Oculus and Anduril), Joe Lonsdale (co-founder of Palantir), and venture capital firms Andreessen Horowitz, Founders Fund, Lux Capital, 8VC, and Elad Gil. Peter Thiel is also reportedly involved. With an initial financing of about $635 million and a valuation that reached $4 billion after a recent funding round, Erebor is well-capitalized.
Its primary mission is to fill the funding gap left by the collapse of Silicon Valley Bank in 2023, aiming to serve technology firms in sectors like cryptocurrency, artificial intelligence, defense, and advanced manufacturing. "You can think of us like a farmers' bank for tech," Luckey explained, highlighting the bank's focus on evaluating startups with unconventional assets.
A key component of Erebor's strategy is the integration of digital assets. The bank plans to use blockchain systems for 24/7 payment settlements, a stark contrast to traditional banking hours. It also intends to offer loans using cryptocurrency or private securities as collateral and finance purchases of expensive AI computer chips.
The bank has secured FDIC deposit insurance and cleared all necessary regulatory checkpoints, including preliminary conditional approval from the OCC in October and FDIC insurance approval in November. The move has drawn some criticism, with Senator Elizabeth Warren among those expressing concerns about expediting charters for crypto-focused institutions. The OCC has declined to comment on the specific approval.
