A group of prominent tech billionaires, including Palmer Luckey, Joe Lonsdale, and Peter Thiel’s Founders Fund, is backing a new digital bank Erebor aimed at restoring a financial lifeline to early-stage tech firms after the collapse of Silicon Valley Bank (SVB) in 2023.
According to reports, the crypto-friendly bank has filed an application for a national banking charter and plans to operate as a fully digital institution.
Erebor wants to plug an SVB-shaped vacuum
Before its abrupt collapse in March 2023, SVB had long served as a financial backbone for early-stage tech companies, crypto firms, and venture capital outfits.
Its downfall triggered a liquidity crisis for startups that relied on it for payroll, credit lines, and capital flows. Many firms struggled to secure alternatives as traditional banks moved cautiously or flat-out refused to engage with such high-risk sectors.
Erebor, named after the fictional mountain in J.R.R. Tolkien’s The Lord of the Rings, hopes to fill that vacuum. It plans to be headquartered in Columbus, Ohio, with a secondary office in New York. It intends to serve tech firms and individuals working or investing in industries such as crypto, AI, defense, and advanced manufacturing.
Erebor isn’t presenting itself as just another neobank. According to its charter application, it will operate entirely online—no branches, no physical checkbooks. What sets it further apart is its plan to hold stablecoins directly on its balance sheet, making it possibly the first U.S. national bank to do so.
This signals a notable shift in how some institutions are approaching the integration of blockchain-based financial tools. While many legacy banks remain hesitant about crypto exposure, Erebor is openly embracing it.
The bank says it wants to become “the most regulated entity conducting and facilitating stablecoin transactions.”
Erebor has powerful industry backing from tech billionaires
The leadership comprises Jacob Hirshman, one of Erebor’s co-CEOs and a former adviser to stablecoin issuer Circle. He will lead the bank alongside Owen Rapaport, co-founder and CEO of digital assets software company Aer Compliance.
According to reports, former Valley National Bank executive Mike Hagedorn is expected to serve as Erebor’s president.
The two leading backers, Palmer Luckey, managing partner at 8VC and co-founder of Palantir with Peter Thiel, and Joe Lonsdale, best known for founding Oculus and Anduril, the defense tech firm, have built a reputation for backing disruptive, high-tech ventures with national security applications. However, they are not expected to play day-to-day roles.
Their involvement and the participation of Founders Fund signify Erebor’s serious intent and deep-pocket backing. Both have strong ties to conservative politics and Silicon Valley’s venture elite.
Erebor’s pitch targets a niche market that has become increasingly underserved in the post-SVB world: companies and investors building in high-risk, high-reward sectors that are often excluded from traditional financial services.
It’s also an early test of whether crypto-native and digital-first banks can meet regulatory scrutiny while delivering the operational benefits touted by fintechs, particularly around stablecoin usage, real-time settlement, and liquidity access.
Erebor’s application is still under review, and a launch date has not been confirmed. If approved, it could become one of the most talked-about entrants in American finance: a venture-backed, crypto-savvy, regulation-first bank for the next wave of technological disruption.
