Erebor Bank Secures Historic Crypto-Friendly Charter as First Approval Under Trump Administration
Erebor Bank, a cryptocurrency-oriented startup financial institution supported by leading technology venture capitalists, receives national banking charter from US authorities, focusing on startups in AI and defense technology sectors.
For the first time since President Donald Trump began his second presidential term, the United States has granted approval to establish a new national banking institution, with the charter being awarded to cryptocurrency-friendly startup Erebor Bank.
On Friday, the Office of the Comptroller of the Currency (OCC) validated the approval, authorizing the financial institution to conduct operations across the entire nation, according to a Wall Street Journal report that cited sources with knowledge of the situation.
The banking entity begins operations with approximately $635 million in initial capital and plans to cater to startup companies, venture capital-funded enterprises and wealthy individual clients, filling a market gap created following Silicon Valley Bank's failure in 2023.
A distinguished group of technology sector investors backs Erebor, featuring Andreessen Horowitz, Founders Fund, Lux Capital, 8VC and Elad Gil. Palmer Luckey, who co-created Oculus, established the project and will serve as a board member while remaining uninvolved in day-to-day management activities.
Erebor targets defense tech, robotics, AI
The banking institution is reportedly establishing itself as a specialized lending service for nascent industries including defense technology, robotics and advanced manufacturing sectors. Companies developing AI-powered manufacturing facilities, aerospace research initiatives and pharmaceutical manufacturing in zero-gravity conditions represent the bank's prospective clientele.
"You can think of us like a farmers' bank for tech,"
Luckey reportedly told the WSJ, arguing that traditional banks often lack the expertise needed to assess startups with unconventional assets.
Erebor intends to incorporate blockchain-powered payment infrastructure that enables continuous transaction settlement, representing an uncommon capability within the United States banking sector, where financial transactions generally operate within standard business hours. Previously, the Federal Deposit Insurance Corp. granted deposit insurance authorization for the institution.
The financial institution's approach encompasses providing credit facilities secured by cryptocurrency assets or private equity securities and offering financing for acquisitions of high-performance artificial-intelligence processing chips.
Erebor hits $4 billion valuation
During October, Erebor obtained preliminary conditional authorization from the OCC. The following month, the Federal Deposit Insurance Corporation granted approval for its deposit insurance application.
Erebor achieved an estimated valuation of approximately $2 billion during a financing round conducted last year and subsequently attained a $4 billion valuation following the completion of a $350 million capital raise led by Lux Capital.