Crypto-focused Erebor Bank gets US approval: Who will it serve?
What's the story
Erebor Bank, a new tech and cryptocurrency-focused financial institution, has received conditional approval from the Office of the Comptroller of the Currency (OCC) to operate in the US. The Columbus, Ohio-based bank was co-founded by Palmer Luckey, Anduril Industries Inc.'s co-founder, and Joe Lonsdale of venture capital firm 8VC. Both were major contributors to Donald Trump's recent presidential campaign.
Market target
Serving tech firms focused on cryptocurrencies
Erebor Bank will mainly serve businesses in the US "innovation economy," including tech firms focused on cryptocurrencies, artificial intelligence (AI), defense, and manufacturing. The bank also plans to cater to individuals working in these industries. However, it has not yet been clarified if foreign nationals, such as Indians, can open accounts with them.
Regulatory process
Regulatory hurdles yet to be cleared
The OCC's conditional approval is a major milestone for Erebor Bank, but it still has to clear some regulatory hurdles before starting operations. This process could take several months. Jonathan Gould, Comptroller of the Currency, emphasized that his office does not impose blanket barriers on banks wanting to engage in digital asset activities if conducted in a safe and sound manner.
Banking services
What will the bank offer?
Erebor Bank will offer both cash and deposits in stablecoin, a type of digital currency whose value is directly linked to a "stable" asset such as the US dollar or gold. The bank's name is inspired by the mountain where Smaug, the dragon from J.R.R. Tolkien's "The Hobbit," hoards his treasure. Despite being its principal shareholder and board member, Luckey won't be involved in day-to-day operations at Erebor Bank.