In a bold move to reshape digital banking in the U.S., Palmer Luckey, co-founder of defence tech firm Anduril, is launching a crypto-focused digital bank with investment from Palantir co-founder Joe Lonsdale. The proposed bank, named Erebor, seeks to fill the void left by the 2023 collapse of Silicon Valley Bank (SVB)—a former key player for startups and venture capitalists.
Erebor: A Next-Gen Digital Bank for Crypto and Tech Startups
Erebor has formally applied for a national bank charter and plans to operate as a digital-only bank based in Columbus, Ohio, with a secondary office in New York. According to its charter application, Erebor will cater to high-growth industries, including:
- Crypto and Web3
- Artificial Intelligence
- Defense technology
- Advanced manufacturing
- Startup founders and VCs
The digital bank aims to support both companies and individuals in these sectors, many of whom struggle to access traditional financial services.
Joe Lonsdale: “Proud Investor” in Erebor’s Vision
Joe Lonsdale, who co-founded Palantir and is a key investor through his venture firm 8VC, confirmed to Reuters that he is a “proud investor” in Erebor. The bank will focus on offering secure and scalable financial solutions to underserved tech sectors. “We believe the future of finance includes banks that are natively digital and aligned with the innovation economy,” said a source close to the project.
Leadership and Operational Model
Erebor will be led by:
- Owen Rapaport – Chief Executive Officer
- Jacob Hirshman – Former adviser to Circle, the issuer of the USDC stablecoin
The bank will not involve Luckey or Lonsdale in day-to-day operations, according to The Financial Times.
Erebor and Stablecoin Strategy
Erebor plans to hold stablecoins on its balance sheet—a rare and significant move for a U.S. bank. These crypto assets are pegged to fiat currencies like the U.S. dollar and are increasingly used by fintechs and financial institutions to:
- Accelerate cross-border payments
- Improve settlement speeds
- Broaden access to digital financial services
Erebor stated in its regulatory filings that it aims to become “the most regulated entity conducting and facilitating stablecoin transactions” in the country.
A Name with Symbolism: Erebor from Tolkien’s Lore
Much like Luckey’s Anduril and Lonsdale’s Palantir, the new bank takes inspiration from J.R.R. Tolkien’s The Lord of the Rings. In Tolkien’s universe, Erebor, or the Lonely Mountain, is a legendary fortress reclaimed from the dragon Smaug—symbolising strength, treasure, and rebirth.
Other Backers: Founders Fund Joins the Project
Peter Thiel’s Founders Fund is also reported to be backing the Erebor project, adding to the roster of Silicon Valley heavyweights supporting the venture. This growing interest from influential tech investors highlights the increasing intersection of traditional finance, cryptocurrency, and venture-backed innovation.
Conclusion
As Erebor Bank moves closer to regulatory approval, it promises to redefine how crypto, defence tech, and AI startups interact with banking systems. By prioritising digital infrastructure, regulatory compliance, and crypto-native features, Erebor is positioning itself as a modern banking solution for the post-SVB innovation economy.
