Tech billionaires set up a new cryptocurrency bank

A group of tech billionaires led by Anduril founder Palmer Lucky has announced the creation of a new bank, Erebor, which will focus on serving cryptocurrency industry participants in the United States. The project is backed by Palantir co-founder Joe Lonsdale and Peter Thiel’s Founders Fund. Erebor is intended to be an alternative to the bankrupt Silicon Valley Bank and plans to integrate digital assets into traditional banking services, including offering crypto asset storage and trading.

In a statement, Erebor said that the bank will operate as a national financial institution that will provide both classic banking products and services related to virtual currencies for legal entities and individuals. The relevant application for a banking license has been submitted to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve.

The new bank will be headed by Owen Rapaport and Jacob Hirschman, who previously served as Circle’s product and regulatory affairs advisor. Erebor will be headquartered in Columbus, Ohio. At the same time, Palmer Luckey and Joe Lonsdale will not be involved in the day-to-day operational management of the institution.

Other market participants also announce the creation of new banks for digital assets: for example, Circle, known as the issuer of USDC and EURC stablecoins, has also applied for a banking license in the United States.