Crypto-friendly Erebor applies for U.S. Banking Charter approval
Peter Thiel to launch Erebor, a crypto-friendly bank alternative
A group of major investors led by PayPal co-founder Peter Thiel plans to launch a new financial company aimed at filling the void left in the U.S. after the collapse of crypto-friendly institutions like SVB and Signature Bank in 2023.
According to sources cited by the Financial Times, the new bank, to be called Erebor, will focus on servicing startups and cryptocurrency companies. Erebor has already applied for a U.S. banking charter that would allow it to operate as a traditional bank.
Thiel’s Founders Fund is one of the bank’s early backers. Other co-founders include Palmer Luckey, co-founder of defense firm Anduril, and Joe Lonsdale, founder of venture firm 8VC.
The shadow of de-banking still lingers
Peter Thiel, one of Silicon Valley’s most influential tech investors and a longtime Bitcoin supporter, is expected to position Erebor as a successor to Silicon Valley Bank, which collapsed in March 2023 amid a broader banking crisis.
There were several high-profile bank failures in the United States in 2023. Source: Cointelegraph
That wave of failures was triggered by rising interest rates and liquidity issues, with regulators citing weak management at crypto-friendly banks and exposure to firms like FTX. Crypto investment funds lost around 10% of assets under management in one week.
Additionally, Harvard Business Review noted the collapse of SVB placed enormous pressure on venture capital financing and startup lending.
While Donald Trump's administration has since pivoted U.S. crypto policy dramatically, issues in venture financing and crypto banking persist. Erebor aims to fill that operational and financial gap, with a guaranteed demand on the market.
As we wrote, Signature Bank was forced to exit the cryptocurrency market
