The news: Erebor, a bank backed by some well-known Silicon Valley investors, has received conditional approval for a national bank charter. It will be a digitally native competitor to lenders that serve the “innovation economy” and some specific industries: Erebor will focus on B2B services for AI, defense, crypto, and manufacturing companies, with offerings for high-net-worth individuals tied to those sectors.
In June this year, Erebor applied to be “the most regulated entity conducting and facilitating stablecoin transactions.” It’s the first de novo conditional approval under the Trump Administration’s new Office of the Comptroller of Currency (OCC) commissioner. It plans to accept virtual currencies as collateral for some loans and hold crypto off its balance sheet to facilitate payment operations.
Political overtones: The Trump administration has a reputation for crypto enthusiasm, and Erebor’s connections may quickly pave the way: Palmer Luckey, the founder, has administration connections from his time at OCC. And many of Erebor’s other backers have ties: Peter Thiel reportedly has had immense influence, and Joe Lonsdale has been a notable Trump backer.
Regulatory backdrop: The first and second Trump administrations’ crypto friendliness has opened up opportunities for crypto in banking. In 2020, the OCC concluded that national banks were permitted to provide cryptocurrency custody. In March this year, the agency loosened restrictions on bank involvement in crypto, including crypto asset custody, “certain stablecoin activities,” and participation in distributed ledger networks.
The macro trend: Crypto has normalized within the banking industry and among regulators and lawmakers. Large financial institutions, notably BNY Mellon and U.S. Bank, offer crypto custody. Citi plans to do the same in 2026. (BNY also custodies assets that underlie stablecoins.) JPMorgan is launching a deposit token to facilitate institutional money movement. The GENIUS Act, signed into law in July, regulates stablecoins.
Our take: The banking industry’s relationship with crypto has transformed as large banks have launched associated custody and payment services. Erebor is not a dramatic transformation of the banking business model or the idea of specialized B2B services and wealth management. But it is designed from the ground up to leverage crypto as part of its payment stack.
The biggest threat to traditional banks is that payments technology quickly advanced beyond what they can support or understand. Real-time payments solve the instant settlement problem that crypto provides for domestic transactions. But the next generation of changes to payments infrastructure is coming—and very few institutions are ready.