On July 3, a number of mainstream financial media confirmed that Peter Thiel is jointly launching a new bank called Erebor with technology tycoons Palmer Luckey and Joe Lonsdale, and has officially applied for a national banking license from the OCC, the U.S. Federal Office of the Comptroller of the Currency. The bank's target customers are cryptocurrency, AI, defense and manufacturing startups that "mainstream banks are unwilling to serve" in an attempt to become a replacement after the collapse of Silicon Valley Bank.

OCC discloses who is behind Erebor's application for a new banking license

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In Tolkien's setting, Erebor is an underground kingdom founded by dwarves that contains a large amount of gold and treasure, which was later occupied by the dragon Smaug. Throughout the story of The Hobbit, the Lonely Mountain is not only a symbol of wealth, but also a symbol of the struggle

image of the crystal ball in the movie "The Lord of the Rings", and the logo of

"Erebor" was chosen as the name of this new bank, and it is no accident. It continues Peter Thiel's usual preferred naming system: his investment company Palantir "means magic crystal ball" from "The Lord of the Rings", and also includes Valar Ventures' counterpart "Vera Protoss" and Rivendell Capital's "Rivendell", both of which are allusions to Middle-earth.

The bank's founders also have a distinct "Silicon Valley political capital crossover":

Peter Thiel (co-founder of PayPal and Palantir, helmsman of Founders Fund),

Palmer Luckey (founder of Oculus, co-founder of Anduril),

Joe Lonsdale (Palantir). Lianchuang, founder of 8VC)

are all important political donors to Trump in the 2024 U.S. presidential election and are closely related to the GENIUS Act currently being promoted by Congress.

According to Erebor's application filed with the Office of the Comptroller of the Currency (OCC), the Founders Fund will participate in the investment as the primary capital backer, and the three founders will not be involved in day-to-day management and will only be involved in the governance structure as directors. The bank's management is led by former Circle consultants and CEO of compliance software company Aer Compliance, which aims to clearly draw the line between politics and operations, highlighting its application positioning as an institutionalized financial institution.

Under this multiple nesting of naming, capital and politics, Erebor's setting is not only a cultural symbol choice, but also a signal - it wants to be seen as the asset center of the new financial order, which is not only in line with the mainstream regulatory system, but also retains the independence of technological capital within the institutional boundaries.

Related Reading: "Silicon Valley Turns Right: Peter Till, A16Z, and Crypto's Political Ambitions"

After SVB, Erebor is back on the rise

In March 2023, Silicon Valley Bank (SVB) collapsed due to asset misallocation and liquidity crisis, becoming the second largest bank bankruptcy case in U.S. financial history. After the accident, deposits from multiple crypto companies such as Circle, BlockFi, and Avalanche were frozen, causing systemic panic and the price of Bitcoin fell below $20,000 at one point. The SVB incident became a turning point in the rupture of Silicon Valley's financial ecosystem and prompted several of Erebor's promoters to launch independent banking initiatives.

SVB's assets were subsequently acquired by First Citizens, and some of its executives moved to HSBC US, partially continuing its service capabilities. However, for a large number of early-stage technology companies, the original account services, credit support and risk tolerance mechanisms are difficult to reproduce. Erebor's bank application clearly states that its target customers include technology companies that were "rejected by mainstream banks due to the collapse of SVB", including cryptocurrency companies (including trading, custody, and settlement), AI startups, defense technology companies, mid-to-high-end manufacturing startups, as well as employees, investors and overseas legal persons of these companies.

Unlike the SVB model, Erebor proposed to adopt a 1:1 reserve system and limit the loan/deposit ratio to less than 50% to avoid the risk of maturity mismatch and credit inflation. According to its documents, stablecoins will be one of the core businesses, and USDC, DAI, RLUSD, etc. are all within the scope of potential custody, with the goal of becoming the "most well-regulated stablecoin trading institution" and providing legal currency entry and exit channels and asset custody services under the premise of compliance.

In addition, Erebor's three main sponsors — Palmer Luckey, Joe Lonsdale and Peter Thiel — are all key donors of the 2024 Trump campaign and have donated to several Republican political action committees. Their direct political ties to the core enablers of the GENIUS Act also allowed the Erebor project to receive clear institutional endorsement as the policy window opens. This triple structure of "financial vacancies + policy expectations + high-risk customers" provides realistic motivation and path design for Erebor's application.

S.394 - GENIUS Act

Crypto banks, Thiel has been planning for a long

One of the most noteworthy forces behind Erebor is the Founders Fund – an established venture capital institution led by Peter Thiel and one of the direct investors in this banking initiative.

Peter Thiel and Founders Fund

Founded in 2005 by Peter Thiel, Ken Howery and Luke Nosk, Founders Fund is one of the first venture capital institutions in Silicon Valley to take "non-consensus investing" as a strategic direction. The fund's early investments include Facebook, SpaceX, Palantir, Stripe, Airbnb and Lyft, leaving a strong mark on the Web2 and deep tech tracks.

Unlike most mainstream venture capitalists, Founders Fund explicitly advocates "dystopian technological idealism" and prefers to invest in areas where policies have not yet been established and institutions have not yet taken shape, especially regulatory gray areas such as defense technology, artificial intelligence, bioengineering, and crypto assets.

In the crypto field, the fund has invested in infrastructure projects such as Anchorage Digital (the first digital asset custodian licensed by the National Bank), LayerZero, BitGo, Ramp Network, and EigenLabs, and is a typical representative of the "institutional crossing" in the path of crypto financialization in the United States.

The Founders Fund has also gained attention for its strong political stance. Founder Peter Thiel has long supported American conservatives and was an important financier of Trump's 2016 and 2024 campaigns, while also active in the policy discourse of anti-regulatory and anti-mainstream central bank systems. The fund is not only a direct investor in Erebor, but also a key intermediary in facilitating its alignment with the political bloc behind the GENIUS Act.

The emergence of Erebor is seen by the outside world as a financial hub extension of this network: it not only provides digital asset settlement and custody services, but also tries to legally undertake a group of emerging corporate customers who are "excluded from mainstream banks" under the framework of the federal system - a significant number of which are long-term support targets of the Founders Fund system, including AI, defense, biotechnology, and high-volatility crypto industries. Looking deeper, in the context of the "GENIUS Act" and the new SEC chairman's push for "stablecoin reregulation", Erebor is likely to strive to become the first "US dollar relay bank" to custody mainstream stablecoins such as USDC and RLUSD in a compliant capacity, providing a path for federal liquidation of stablecoins.

This is not just the birth of a new bank, but more like a "built-in system" dominated by venture capital logic: Founders Fund is not betting on a financial institution, but establishing a controllable financial order interface to build an independent and stable fulcrum that can cross the existing financial structure for its dominant technology empire system. If Erebor is licensed and operates smoothly, it could become the first financial middle platform built by venture capital, entered through a policy window, and served "enterprises inside and outside the institutional boundary".

Crypto Banking's Competitive Landscape and Future Challenges

Erebor faces a tough challenge. As the regulatory environment in the United States gradually becomes clearer, the crypto industry is ushering in a new round of "compliant banking" window period, and a group of players with different positions are accelerating their layout:

Anchorage Digital is the first crypto custodian to be licensed by the National Bank, focusing on government cooperation and institutional-level asset services;

Circle has applied for a trust bank license, focusing on USDC reserve custody and circulation clearing;

Ripple plans to use the RLUSD stablecoin to build a new cross-border settlement network and simultaneously apply for a federal banking license;

In addition, state-level trust banks such as Custodia Bank and Paxos Trust are also exploring stablecoin financial services pegged to the US dollar in different paths.

In contrast, Erebor differentiates itself by applying for a full-featured national banking license and explicitly writing "stablecoin trading and custody" into its main business scope. This naturally qualifies it for cross-state operation and full compliance, and its service targets are no longer limited to the digital asset industry, but have expanded to customer groups such as AI, defense, and biotechnology that are "considered high-risk by traditional banks". Compared with Anchorage, which focuses on institutional custody, Erebor is more like a "commercial bank middle platform" that supports encryption and high-tech enterprises. Compared with Circle, Ripple, and other B2B circulation market-oriented roles, Erebor attempts to establish a financial node with a higher regulatory level and a higher entry threshold within the federal system.

In short, Erebor is not a "filler" in the crypto banking landscape, it is an "institutional rush" that strives to differentiate itself from license selection, asset structure to target customers. In the future, it may not only compete with other crypto banks for customer resources, but also deeply intersect with the Fed-led payment system and stablecoin legislation, becoming one of the most symbolic attempts in this round of "digital dollar" institutional evolution.

Thiel's Erebor doesn't just want to help AI companies manage their money, it wants to be the "transfer interface" for the future of finance - between traditional banks and crypto assets, between state regulation and technological autonomy.

If it succeeds, it will not only host stablecoins - it will host a portion of the future channel of "digital power".

After all, in Middle-earth, dwarves can indeed create their own kingdoms.