Trump-Backed Erebor Secures Federal Charter for Crypto Bank Igniting Stablecoin Battle
Erebor has made history by securing a conditional federal charter to operate as a cryptocurrency bank. This milestone marks the bank as the first of its kind to receive such approval under the Trump administration, and it is only the second federally chartered crypto bank in the United States, following Anchorage Digital.
Backing and Strategy
Erebor is backed by influential players in Silicon Valley, including weapons manufacturer Palmer Luckey and tech entrepreneurs Joe Lonsdale and Peter Thiel. This trio has strong ties to former President Donald Trump, making Erebor a notable force in the cryptocurrency sector.
Importance of the Federal Charter
The Office of the Comptroller of the Currency (OCC) conditionally approved Erebor’s charter application on a recent Wednesday. With this approval, Erebor gains the privilege to operate nationally, accept deposits, and offer loans. Additionally, the bank aims to facilitate stablecoin transactions, which have become increasingly pivotal in the digital finance landscape.
The Impact of the GENIUS Act
The approval coincides with the enactment of the GENIUS Act, signed into law in July, which provides a legal framework for stablecoin issuance and trading. The stablecoin market currently holds a value exceeding $312 billion and is projected to surpass $360 billion by February 2026, according to data from Myriad.
Competitive Landscape
With the passage of the GENIUS Act, Anchorage enjoyed significant advantages as the only federally chartered crypto bank until Erebor’s recent achievement. Anchorage’s CEO, Nathan McCauley, referred to the federal charter as a “golden ticket” for issuing stablecoins.
- Erebor’s conditional approval may offer it a first-mover advantage in stablecoin issuance.
- The bank reported securing over $250 million in funding to support its operations.
- Intends to provide various financial services, including credit products and payment services.
Future Prospects
As Erebor prepares to meet auditing and security requirements, it looks to challenge established firms like Anchorage. Other major crypto entities, such as Coinbase, Stripe, and Circle, have also sought bank charters, intensifying competition within the sector.
While Anchorage’s McCauley expressed skepticism about the speed of future approvals, Erebor’s swift success—achieving a federal charter in just four months—signals a potentially transformative shift in the stablecoin landscape. The evolving crypto banking environment is watched closely by both investors and regulators.
