Original | Odaily Planet Daily ( @OdailyChina )
Author: Azuma ( @azuma_eth )
On July 3, several mainstream financial media reported that several billionaires in the technology field, including PayPal co-founder and Silicon Valley venture capital giant Peter Thiel, are jointly launching a new bank called Erebor, which aims to fill the gap in banking services for the cryptocurrency industry after the collapse of Silicon Valley Bank.
The Financial Times reported that in addition to Peter Thiel, other billionaires who initiated Erebor include Palmer Luckey, co-founder of defense technology company Anduril, and Joe Lonsdale, founder of big data analysis company Palantir (also co-founder of the company). Founders Fund, the venture capital fund headed by Peter Thiel, will also invest directly in Erebor.
If Palmer Luckey and Joe Lonsdale are introduced in this way, many readers may still feel unfamiliar. So let us put it another way. The two of them and Peter Thiel are all important financial backers of Trump in the 2024 US presidential election.
It is worth mentioning that Erebor is named after the magical masterpiece The Hobbit. In the book, it is a lonely mountain occupied by the evil dragon Smaug, and under it are countless treasures of the dwarves. In addition, Anduril and Palantir are also named after the series of works. The former means the famous sword Flame of the West, and the latter means a crystal ball that can travel through time and space and see everything in the world.
Erebor has applied to the Office of the Comptroller of the Currency, the U.S. federal banking regulator, for a national bank charter, which will allow Erebor to conduct banking business. According to the application documents released this week, Erebor will serve as a national bank...provide traditional banking products and virtual currency-related services to businesses and individuals. Its target customers are companies in the U.S. innovative economy, especially technology companies focusing on cryptocurrency, artificial intelligence, defense and manufacturing, while serving the employees and investors of these companies, and plans to provide services to overseas companies seeking access to the U.S. banking system.
The Financial Times particularly emphasized that Erebor hopes to take over Silicon Valley Banks original market positioning and provide banking services to high-risk companies and cryptocurrency practitioners who may be rejected by traditional banks.
In 2023, Silicon Valley Bank, which had a glorious 40-year history and had won the Forbes Best Bank in America award for five consecutive years, declared bankruptcy due to a liquidity crisis. Since many cryptocurrency-related projects/institutions including BlockFi, Circle and Avalanche were clients of Silicon Valley Bank at the time, the cryptocurrency industry suffered a heavy blow. In the panic, BTC once fell below US$20,000.
According to people familiar with the matter, Erebors co-founders began discussing the establishment of the bank after the collapse of Silicon Valley Bank in 2023. Although Silicon Valleys assets were acquired by First Citizens BancShares and restarted, and some of the banks professionals also moved to HSBC USA, investors and executives of start-up technology companies still generally complain about obstacles in obtaining banking services - many companies find it difficult to obtain financing support at the original level.
Erebor said in the application that stablecoin-related businesses will also be a top priority for the bank - stablecoins pegged to real assets such as the US dollar are expected to become the banks business focus, and the document emphasizes that its goal is to become the institution with the most complete supervision of stablecoin transactions.
Odaily Note: Banking services around stablecoins and cryptocurrencies have become a new focus of competition, and Circle has recently submitted an application for a banking license. For details, see 60 billion US dollars in assets under self-custody, the first stablecoin stock Circle applies for a federal trust bank license .
People familiar with the matter said that Palmer Luckey and Joe Lonsdale will not be involved in the daily management of Erebor. The banks co-CEOs will be Jacob Hirshman, a former Circle consultant, and Owen Rapaport, co-founder and CEO of digital asset software company Aer Compliance, and Valley National Bank, a former senior executive vice president of Valley National Bank in New Jersey, will serve as president.
Erebors bank will be headquartered in Columbus, Ohio, and will also have an office in New York, but will only provide digital services, and all products will be marketed through smartphone applications and websites. Details of the filing, including shareholder composition, equity structure and business plan, remain confidential.
As the GENIUS Act has been successfully passed by the Senate, the new SEC chairman has personally promised to establish a reasonable regulatory framework for the crypto asset market. Cryptocurrency-related investment and business activities will inevitably continue to grow, while there is still a certain gap in related banking services. Including Erebor, many players have noticed this piece of cake .
Expect more competition around the service for the foreseeable future, but for the cryptocurrency industry itself, which has been plagued by conservative banking services, the more competition the better.
