Author: BitpushNews
The collapse of Silicon Valley Bank (SVB) in 2023 shook the fintech world significantly, leaving a service gap that urgently needs to be filled. Now, a new battle to reshape the financial landscape is quietly unfolding.
According to the latest news from the Financial Times, a new 'crypto bank' named Erebor is being prepared, driven by the collaboration of Silicon Valley giants including Joe Lonsdale, a staunch ally of President Trump, Oculus VR founder Palmer Luckey, and PayPal co-founder Peter Thiel.
Peter Thiel (right), Palmer Luckey (center), and Joe Lonsdale (left)
The name Erebor comes from the 'Lonely Mountain' in The Hobbit, which is rich in treasure, perhaps symbolizing the bank's grand goal: to find 'treasure-like' financial services for emerging technologies in the 'desert' of traditional finance.
Reportedly, Erebor aims not only to fill the service gap left by SVB for tech companies but also to make stablecoins a core strategy, with the goal of becoming 'the most regulated entity for conducting and facilitating stablecoin transactions,' indicating that the integration of traditional finance and crypto will enter a new phase.
The 'unhealed pain' of SVB's collapse: High-tech enterprises urgently seek a new 'backing.'
Silicon Valley Bank (SVB) was once the 'preferred bank' for U.S. tech startups and venture capital, providing services to countless startups deemed 'high-risk' by traditional large banks. From deposits and loans to investment banking, it covered nearly every stage of tech companies' growth. It was deeply tied to Silicon Valley's entrepreneurial ecosystem, becoming an important financial partner for many innovative companies from incubation to listing.
However, an excessive focus on technology sector clients, along with significant unrealized losses due to misjudgments about the Federal Reserve's interest rate hike cycle, and the speed and scale of bank runs in the age of social media ultimately triggered a liquidity crisis in March 2023.
Although the U.S. government quickly intervened afterward to protect depositors through emergency measures, traditional large banks have generally maintained a cautious attitude toward technology, especially high-risk startups in the crypto and AI sectors, following SVB's collapse, resulting in a clear financial services 'vacuum' in the market, making it urgent to find a 'new backing' that understands and supports their development.
'Lonely Mountain' Bank Erebor: The Ambitions of Giants
Erebor may have thus come into being, with a list of founders that can be described as luxurious:
Palmer Luckey: The legendary founder of the virtual reality (VR) headset company Oculus VR, who sold Oculus VR to Facebook (now Meta) for a high price of $2 billion, becoming a pioneer in the VR field. Palmer Luckey then transitioned to defense technology, co-founding Anduril Industries in 2017, a company focused on providing advanced AI-driven unmanned systems, sensors, and surveillance technology for the U.S. and its allies. Anduril quickly rose to prominence in the defense technology field with its rapid iteration and disruption of traditional military giants.
Peter Thiel: A legendary figure in Silicon Valley, wearing multiple hats: co-founder of PayPal, spiritual leader of the 'PayPal Mafia,' co-founder of big data company Palantir, early investor in Facebook, and founder of the famous venture capital firm Founders Fund.
Peter Thiel is known for his unique libertarian views and contrarian thinking; he has invested in many world-changing companies such as SpaceX and Airbnb, has an unusual obsession with 'disruptive innovation,' and is also an advocate for cryptocurrency.
Joe Lonsdale: Co-founder of Palantir and a politically active figure. Joe Lonsdale is a disciple of Peter Thiel and one of the co-founders of Palantir. After leaving Palantir, he founded another well-known venture capital firm, 8VC, investing in numerous emerging tech companies. Like Thiel, Lonsdale is also very politically active and is one of the major donors to President Trump's 2024 campaign.
This special political background undoubtedly adds strategic imagination to Erebor's future. During Trump's second term, the regulatory environment in the U.S. has embraced crypto, and Erebor's high-profile entry at this time may be precisely because it has identified this 'policy dividend window,' attempting to seize opportunities within the new regulatory framework.
Wants to be the 'most regulated' stablecoin bank
According to its national banking license application, Erebor Bank's headquarters will be located in Columbus, Ohio, with a secondary office in New York, adopting a digital-first operating model. It clearly states that it will serve emerging tech companies in fields such as artificial intelligence, cryptocurrency, defense, and manufacturing, as well as investors and employees in these areas. This vertical segmentation and highly specialized market positioning is key to distinguishing Erebor from traditional banks.
Erebor's core strategy also lies in its deep embrace and vision of compliance for stablecoins.
Reportedly, Erebor plans to incorporate stablecoins into its balance sheet. Stablecoins, as a type of crypto asset pegged to fiat currencies like the dollar, are increasingly becoming a key tool for accelerating cross-border payments, simplifying settlements, and expanding the accessibility of digital financial services due to their stability in value, high transaction efficiency, and low costs. Previously, fintech companies and traditional financial institutions have begun to attempt to use stablecoins for cross-border settlements, and Erebor elevates this to a strategic level within its core banking business.
One of Erebor's co-CEOs, Jacob Hirshman, previously served as an advisor to the well-known stablecoin company Circle, which is the main issuer of the US dollar stablecoin USDC. Circle's compliance framework has always been an important channel for traditional financial institutions to enter the crypto world. Hirshman will replicate a similar path at Erebor, establishing it as the 'most regulated entity for stablecoin trading execution and facilitation.'
Through this strategy, Erebor not only hopes to become the 'new financier' of Silicon Valley and emerging technology sectors, but also aims to be the 'official bridge' connecting the dollar and digital dollars. It could change the traditional ways companies conduct cross-border transactions and manage digital assets, allowing stablecoins to truly enter mainstream finance. Previously, the SEC's corporate finance department released new guidelines for cryptocurrency ETP disclosures, which indirectly confirms that regulators are actively preparing for the integration of digital assets into the traditional financial system, aligning with Erebor's compliance path.
The ambition of Silicon Valley's new 'financier': Who will benefit, and who will be pressured?
Erebor Bank's entry is bound to create ripples in the fintech sector, with its impact being multidimensional:
For emerging tech companies, Erebor's arrival is timely. In fields such as AI and crypto, many startups have long faced 'cold treatment' from traditional banks. The customized financial services provided by Erebor precisely address these companies' pain points in financing, operations, and compliance, allowing them to focus more energy on technological innovation. Especially for Web3 companies, having a financial service provider that focuses on blockchain technology is undoubtedly good news.
For the entire crypto industry, Erebor could become an important compliance benchmark. If it can successfully operate its stablecoin business under a strict regulatory framework, it will greatly accelerate the acceptance of digital assets by the mainstream market. This may attract more traditional institutional funds into the crypto space.
For traditional banking, Erebor's emergence is a signal worth noting. This new digital bank, with its precise positioning and professional background, is competing for the most growth-potential technology client base. In the face of such competitors, traditional banks may need to accelerate innovation and reassess their attitudes towards emerging technologies. In the future, we are likely to see more traditional banks begin to transform or choose to collaborate with specialized digital financial service providers.
In short, the competition in the crypto world is increasingly resembling a game of giants—Silicon Valley capital and Wall Street old money are both entering the fray, and now Erebor has joined this competition. Whether this company named after the 'Lonely Mountain' can find its own 'one ring' may become one of the most notable stories in the coming years.
