The Office of the Comptroller of the Currency (OCC) approved the national charter for the Columbus, Ohio-based institution, which aims to serve cryptocurrency companies, AI startups, and defense contractors.

This marks the first new bank charter approved under OCC Comptroller Jonathan Gould, who took office in July 2025. The decision signals a major shift in how federal regulators view digital assets and crypto-focused banking.

Fast-Track Approval Draws Attention

Erebor filed its charter application in June 2025 and received conditional approval just four months later. The speed of this process has raised eyebrows, especially since traditional charter applications often take a year or longer.

Comptroller Gould defended the approval process. “I am committed to a dynamic and diverse federal banking system, and our decision today is a first but important step in living up to that commitment,” he stated in the official announcement. He added that the decision proves the OCC “does not impose blanket barriers to banks that want to engage in digital asset activities.”

Source: @USOCC

Senator Elizabeth Warren criticized the approval, calling it a “fast tracked approval of this risky venture that could set up another bailout funded by American taxpayers.” However, sources close to Erebor insisted there was no special treatment despite the founders’ political connections to the Trump administration.

Filling the Silicon Valley Bank Gap

The collapse of Silicon Valley Bank in March 2023 left thousands of tech startups and venture capital firms scrambling for banking services. Traditional banks proved reluctant to work with high-risk tech companies, particularly those in cryptocurrency and defense sectors.

Palmer Luckey, founder of virtual reality company Oculus and defense contractor Anduril, experienced this problem firsthand. His company had banked with SVB before its collapse. Together with Joe Lonsdale—co-founder of data analytics firm Palantir—Luckey decided to create a replacement.

The bank’s name comes from J.R.R. Tolkien’s “The Hobbit,” where Erebor refers to the Lonely Mountain filled with treasure. The founders raised $275 million in capital, with backing from Peter Thiel’s Founders Fund and crypto investment firm Haun Ventures.

Leadership Team and Business Model

Erebor will operate under co-CEOs Jacob Hirshman and Owen Rapaport. Hirshman previously worked as an adviser at Circle, a major stablecoin company. Rapaport co-founded Aer Compliance, which provides monitoring software for digital assets. Mike Hagedorn, a former senior executive at Valley National Bank, will serve as president.

The bank plans to offer traditional banking services—checking accounts, business loans, and payment processing—alongside crypto-specific products. Stablecoins will form a core part of the business. These digital tokens are pegged to traditional currencies like the U.S. dollar and are used for faster, cheaper international payments.

In its charter application, Erebor stated its goal is to become “the most regulated entity conducting and facilitating stablecoin transactions.” The bank will hold approximately $1 million in cryptocurrency on its balance sheet for operational purposes, such as transaction fees.

Sources close to the bank emphasized its conservative approach. “We want to be a stable, low-risk, reliable bank doing normal banking things without screwing everyone over with undue risk,” one person told the Financial Times. They added that the fast approval reflected Erebor’s “extremely conservative business plan” rather than political favoritism.

Digital-Only Operations from Ohio

Erebor will operate entirely through digital channels—no physical branches. The headquarters will be in Columbus, Ohio, with a secondary office in New York City. Customers will access all services through a mobile app and website.

The choice of Ohio as headquarters connects to Anduril’s planned $1 billion manufacturing facility in the state. This creates potential synergies between Luckey’s defense technology company and the new bank.

The bank’s target customers include tech startups working in cryptocurrency, artificial intelligence, defense technology, and advanced manufacturing. Erebor will also serve high-net-worth individuals who work for or invest in these companies, as well as international firms seeking access to the U.S. banking system.

Regulatory Environment Shifts

The approval comes during a broader change in how federal agencies treat cryptocurrency. Under the Trump administration, banking regulators have taken a friendlier stance toward digital assets.

The Federal Reserve withdrew guidance that previously discouraged banks from offering crypto services. The Fed and OCC also issued joint statements clarifying how existing rules apply to banks holding cryptocurrency on behalf of customers.

Erebor still faces several hurdles before opening its doors. The bank must meet additional compliance and security requirements, a process expected to take several more months. The Federal Deposit Insurance Corporation (FDIC) must also approve deposit insurance, though this typically follows OCC approval for national banks.

The bank will operate under heightened supervision during its first three years as a de novo (newly chartered) institution. Regulators will closely monitor its operations and the bank cannot significantly deviate from its approved business plan during this period.

The Mountain Ahead

Erebor represents a test case for how crypto-focused banks can operate within the traditional regulatory framework. If successful, it could pave the way for similar institutions serving tech-heavy industries that struggle to access conventional banking services.

The bank’s conservative approach—holding mostly Treasury securities and offering low loan-to-deposit ratios—aims to avoid the mistakes that brought down Silicon Valley Bank. Whether this strategy can balance innovation with stability remains to be seen.

For now, thousands of tech startups and crypto companies have a potential new banking partner on the horizon, backed by some of Silicon Valley’s most influential figures and approved by federal regulators who appear ready to welcome digital assets into mainstream finance.