Tech billionaires led by Palmer Luckey to launch new bank to rival SVB, FT reports
(Reuters) -A group of tech billionaires led by Anduril co-founder Palmer Luckey are launching a new crypto-focused U.S. bank to fill the void left by Silicon Valley Bank's collapse, the Financial Times reported on Wednesday, citing people familiar with the matter.
The group also includes Peter Thiel's Founders Fund and Palantir co-founder Joe Lonsdale, a major donor to U.S. President Donald Trump's 2024 campaign, the report said.
Before a March 2023 liquidity crisis, SVB had long been a major primary banking channel for early-stage technology firms and venture capitalists - entities deemed too risky by traditional banks. Many startups struggled to access capital and meet immediate obligations such as payrolls after the bank collapsed.
The proposed lender, called Erebor, has applied for a national bank charter and plans to serve technology businesses in areas such as artificial intelligence, crypto, defense and manufacturing, as well as individuals who work at or invest in them, according to its charter application.
The application for Erebor, to be headquartered in Columbus, Ohio, outlines a digital-only model, with a secondary office in New York.
According to the charter application, the bank will be led by co-CEOs Owen Rapaport and Jacob Hirshman, a former adviser to stablecoin company Circle.
Erebor is also planning to hold stablecoins on its balance sheet. A crypto asset class pegged to currencies such as the U.S. dollar, stablecoins are designed to hold a steady value backed by reserves.
Fintechs and established financial institutions are increasingly adopting stablecoins to accelerate cross-border payments faster, simplify settlements and expand access to digital financial services.
The bank aims to become "the most regulated entity conducting and facilitating stablecoin transactions", according to its charter application.
Luckey and Lonsdale are not expected to be involved in the day-to-day management of the bank, the Financial Times report said.
Luckey, Thiel, Lonsdale and a spokesperson for Erebor did not immediately respond to Reuters request for comment.
(Reporting by Ateev Bhandari in Bengaluru; Editing by Pooja Desai)
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