- Prominent tech billionaires and VC funds are planning to launch a crypto and AI-focused bank
- The bank, Erebor, is in the process of securing a national charter and licenses in key jurisdictions
- The new entity is seen as the spiritual successor to Silicon Valley Bank
Erebor, a recently revealed virtual bank backed by fintech luminaries such as PayPal co-founder Peter Thiel, is positioning itself as the go‑to financial institution for high‑growth sectors like cryptocurrency and AI. The bank, whose existence was revealed yesterday by the Financial Times, will pick up where the ill-fated Silicon Valley Bank left off when it launches, with its client base also including the defense and manufacturing sectors. Erebor, which has established its headquarters in Columbus, Ohio, has applied for a U.S. national charter and plans to become “the most regulated entity conducting and facilitating stablecoin transactions.” Led by co‑CEOs Jacob Hirshman, formerly of Circle, and Owen Rapaport, formerly of Aer Compliance, the outfit has already attracted dozens of clients traditionally underserved by legacy banks, a market which is ripe for tapping.
Built for Frontier Industries
Erebor’s existence came to light yesterday, with other outlets quickly confirming the news. The bank is supported by tech heavyweights, being led by Palmer Luckey and with funding and endorsement from Peter Thiel’s Founders Fund; according to a Reuters report, Lonsdale confirmed he is a “proud investor” in Erebor.
Erebor’s charter application outlines a digitally native bank targeting sectors often shunned by mainstream finance: crypto, AI, defense tech, and manufacturing. It intends to offer traditional banking products alongside virtual currency services and stablecoin holdings on its balance sheet, aiming to ensure compliance while enabling real-time digital asset operations.
Filling the Silicon Valley Bank Void
Erebor stands to become the spiritual successor to Silicon Valley Bank, being digitally centered, well‑capitalized, and tailored to a clientele often considered “too risky” by traditional banks. Silicon Valley Bank collapsed in March 2023 after a rapid run on deposits triggered by fears over its large holdings in long-term U.S. Treasury bonds, which had lost value due to rising interest rates.
With stablecoins central to its model and the backing of some of Silicon Valley’s most outspoken advocates of crypto and innovation, the bank is now awaiting regulatory approvals. If successful, it could reshape the banking options for crypto, AI, and defense startups, offering continuity and confidence in a sector still reeling from Silicon Valley Bank’s collapse.
