Erebor, a financial services firm backed by billionaire Peter Thiel, has gained regulatory approval to operate in the United States—a significant step that may help address the void created by the collapse of Silicon Valley Bank in 2023.
As reported by the Financial Times on Wednesday, Erebor has obtained a preliminary banking charter but still needs to navigate various compliance and security challenges before commencing operations—a process that could span several months.
The Office of the Comptroller of the Currency (OCC) has confirmed the approval, with Comptroller Jonathan V. Gould stating that “permissible digital asset activities […] can have a role in the federal banking system if conducted safely and soundly.”
Erebor aims to serve as a lender for the innovation economy, concentrating on businesses in fields like cryptocurrency, artificial intelligence, and advanced technology.
“Our goal is to be a stable, low-risk, trustworthy bank engaging in traditional banking without exposing customers to unnecessary risk,” a source close to the company stated to the Financial Times.
Previous reports suggested that Erebor intends to be a vital source of funding for early-stage startups that have faced difficulties in accessing conventional capital markets due to stricter regulatory scrutiny.
This cautious environment follows the regional banking upheaval in the U.S. in March 2023, when Silicon Valley Bank, Silvergate Bank, Signature Bank, and First Republic Bank collapsed or were taken over. Additionally, rising interest rates have made financing more challenging for companies.
Related: Peter Thiel vs. Michael Saylor: Crypto treasury bet or bubble?
Regulatory changes prompt crypto firms to grow
The approval occurs alongside a surge of regulatory momentum in the United States, as President Donald Trump has enacted a significant stablecoin bill, while Congress is considering further legislation regarding crypto market structure and central bank digital currency (CBDC) regulations.
Various crypto companies are capitalizing on this momentum to pursue regulatory approval for expanded operations.
Crypto exchange Coinbase has submitted an application for a national trust company charter with the OCC, joining several other digital asset firms in seeking similar licenses. While Coinbase has indicated it does not aspire to become a bank, this charter would enable it to broaden its services in payments and custody.
Circle, the provider of the USDC stablecoin, has also sought to establish a national trust bank, with Ripple Labs filing for a similar license.
However, not all stakeholders have welcomed these developments. U.S. banking and credit union associations have urged the OCC to hold off on granting bank charters to crypto firms, citing significant policy and process concerns.
Caitlin Long, founder of Custodia Bank, countered these objections, suggesting that the issue may end up in court.
Long claimed that the question of whether trust charters can operate as de facto bank charters—allowing institutions to make loans and access Federal Reserve master accounts with only a fraction of the capital that full-service banks require—“is likely to be litigated.”
Related: Bank lobby is ‘panicking’ about yield-bearing stablecoins — NYU professor
