Erebor Bank Aims to Fill SVB Void with Crypto and Tech Focus

Erebor Bank, a new venture founded by Palmer Luckey with significant backing from tech heavyweights Peter Thiel and Joe Lonsdale, is stepping in to fill the gap left by Silicon Valley Bank’s (SVB) dramatic closure in 2023. The ambitious project has officially applied for a national bank license, signaling its intent to directly serve startups in the cryptocurrency and tech sectors that have struggled to find supportive banking partners since SVB’s downfall.

A Vision for Crypto and Stablecoin Banking. Erebor is spearheaded by Palmer Luckey, the visionary behind Oculus VR and Anduril Industries, with financial and strategic support from Peter Thiel’s Founders Fund and Joe Lonsdale’s 8VC. Their involvement points to Erebor’s high-stakes goal of pioneering digital asset integration in mainstream banking. A notable detail in the bank’s application to the U.S. Office of the Comptroller of the Currency is its potential plan to include stablecoins on its balance sheet, a move that could redefine how digital assets interact with traditional banking. While Erebor has yet to specify which stablecoins it would adopt, the charter application hints at a Bitcoin focus as part of its broader digital asset strategy.

Erebor’s plan has triggered speculation across tech forums and crypto circles, with potential partnerships and ecosystem expansions being hot topics on Telegram and X (formerly Twitter). Despite the chatter, no official endorsements or detailed partnership announcements have surfaced from Erebor’s founding team. Industry insiders believe the new bank could carve out a valuable niche by servicing crypto-focused startups and tech innovators still grappling with limited access to banking services after the sudden void left by SVB.

Erebor was founded by Palmer Luckey, known for his work with defense contractor Anduril, alongside venture capitalist Joe Lonsdale and Peter Thiel. The bank’s establishment is a direct response to the funding disruption that followed the collapse of Silicon Valley Bank (SVB) in March 2023, which left many startups without reliable banking partners. Founders Fund’s involvement lends Erebor credibility and visibility among technology investors and entrepreneurs. Erebor’s application for a national bank charter details plans to provide both traditional banking services and a suite of virtual currency-related offerings. The bank will focus on serving companies in sectors such as cryptocurrency, artificial intelligence, defense, manufacturing, and individuals working in or investing in these areas. Erebor also intends to offer U.S. banking services to non-U.S. firms, broadening its client base globally.

A key part of Erebor’s business model is facilitating stablecoin transactions. The bank aims to become the most regulated entity in this space, handling stablecoins—digital assets pegged to fiat currencies like the U.S. dollar. Erebor will operate exclusively through digital channels, with all customer interactions conducted via its app and website. Headquarters will be in Columbus, Ohio, with an additional office in New York. Although launched by high-profile tech figures, Erebor’s operations will be led by co-CEOs Jacob Hirshman, formerly of Circle, and Owen Rapaport, CEO of Aer Compliance. Mike Hagedorn, with previous experience at Valley National Bank, will serve as president. Luckey and Lonsdale will not have operational roles, focusing instead on strategic direction.

Erebor’s creation addresses a visible gap in the U.S. startup banking landscape following the 2023 collapse of SVB—a bank that once held significant sway in the innovation economy. Many early-stage tech firms have struggled to secure credit since SVB’s demise, as risk appetite among traditional banks diminished. Erebor’s focus on serving both traditional and crypto sectors aligns with founders' experience navigating regulatory and financial complexities. Founders Fund’s history of backing major tech firms further adds to market confidence in Erebor’s prospects. Industry observers suggest Erebor could play a significant role in restoring capital access to startups and tech ventures, especially those operating at the intersection of finance and new technologies. The bank’s emphasis on regulatory compliance in stablecoin transactions may set a compliance benchmark for similar institutions. Success will depend on Erebor’s ability to secure its national charter and to attract high-growth clients wary after SVB’s collapse. The evolving regulatory environment and ongoing demand for digital banking services among startups will shape Erebor’s future impact.