Erebor, a financial services company backed by billionaire Peter Thiel, has received regulatory approval to launch in the United States – a move that will help fill the gap left by the collapse of Silicon Valley Bank in 2023.
According to a report According to the Financial Times on Wednesday, Erebor has obtained an initial banking charter but must still clear several compliance and security hurdles before it can begin operations – a process that could take months.
Approval is confirmed Through the Office of the Comptroller of the Currency (OCC), with comptroller Jonathan V. Gould “allowing digital asset activities (…) have a place in the federal banking system if conducted in a safe and orderly manner.”
Erebor positions itself as a lender in the so-called innovation economy, focusing on businesses in sectors such as cryptocurrency, artificial intelligence and advanced technology.
“We want to be a stable, low-risk, reliable bank that does normal banking things without taking away everyone with undue risk,” a person close to the company told the Financial Times.
Earlier reports indicated That Erebor aims to be a major source of funding for early-stage startups struggling to access traditional capital markets amid tighter regulatory scrutiny.
Much of that caution followed the US regional banking crisis in March 2023, when Silicon Valley Bank, Silvergate BankSignature Bank and First Republic Bank all collapsed or were taken over. Rising interest rates have made it more difficult for companies to secure financing.
Related: Peter Thiel vs. Michael Saylor: Crypto Treasury Bet or Bubble?
Regulations change spur crypto firms to expand
The approval comes amid a wave of regulatory momentum in the United States, as President Donald Trump has signed a stableCoin master bill in law and Congress is weighing additional legislation on the structure of the crypto market and restrictions on a central bank digital currency (CBDC).
Many crypto companies are seizing the moment to seek regulatory approval for expanded operations.
Exchange crypto Coinbase applied For a National Trust Company Charter with the OCC, join the many other digital asset firms seeking similar licenses. Although Coinbase has said it does not intend to become a bank, the charter will allow it to expand into areas such as payments and custody services.
Circle, the issuer of USDC StableCoin, has one too Applied to establish a National Trust Bankwhile Ripple Labs has filed for a similar license.
However, the move was not welcomed by everyone. The banking and credit trade groups of the United States urged the OCC to delay Providing bank charts to crypto companies, citing “significant policy and process concerns.”
Custodia Bank founder Caitlin Long has pushed back against those objections, pointing out that the issue will likely end up in court.
Long argued that the question of whether Trust Charters can function as Facto Bank Charters—allowing institutions to make loans and obtain Federal Reserve master accounts with only a fraction of the capital required of full-service banks—is “likely to be litigated.”
Related: Bank Lobby is ‘Panicking’ about yield-bearing stablecoins-NYU professor
