Silicon Valley billionaires plan to start a new lending bank focused on crypto currency and tech companies in Columbus called Erebor.
Erebor is being launched by several tech billionaires like Anduril founder Palmer Luckey and Palantir founder Peter Thiel, according to a filing with the U.S. Treasury’s Office of the Comptroller and the Currency, filed in late June. The filing states the bank will be headquartered in Columbus with another office in New York City.
The filing states the bank’s goal would be to become the most regulated entity conducting and facilitating stablecoin transactions and to bring this “modern” financial tool fully within regulatory boundaries. The filing states the bank will serve technology businesses investing in artificial intelligence, crypto, defense and manufacturing, as well as individuals who work at or invest in them.
Erebor would provide its products and services nationwide and globally. The bank will not be physically accessible to the public to make deposits, receive withdrawals or borrow money.
The filing states a final location for its Columbus main office hasn’t been identified yet.
The filing doesn’t explicitly name Thiel and Luckey, but Reuters and The Financial Times confirmed their involvement with the billionaires themselves.
Luckey is expanding Anduril into the Columbus area with its Arsenal 1 campus just south of the city in Pickaway County. The military drone manufacturer hopes to bring 4,000 jobs to the factory.
Thiel’s Palantir is a software creator. Thiel has deep connections to Ohio politics, including funding Vice President JD Vance’s 2022 U.S. Senate campaign.
If you see a literary theme in these company names, its no coincidence. Erebor is named for the mountain J.R.R. Tolkien’s dwarves from “The Hobbit” hoarded so much gold in, that it attracted a dragon. The dragon, Smaug, caused the destruction of the dwarven society.
Anduril was named for “The Lord of the Rings” character Aragorn’s sword, while Palantir was named for the magical orbs from the series that allows users to see events and places far away.
Ohio business leaders hope the bank will help draw more companies to the region as Intel and Anduril build their new factories.
Ohio Chamber of Commerce President & CEO Steve Stivers said Erebor could attract even more tech companies to central Ohio.
“Whether it’s AI or crypto or defense or manufacturing, especially advanced manufacturing, those are going to be some innovation segments that Erebor is really focused on. I think that’s all great for Ohio’s economy,” Stiver said.
Underlying Erebor’s announcement is the collapse of the Silicon Valley bank two years ago. The tech-focused bank shuttering left a void.
Stivers and Columbus Chamber of Commerce President and CEO Derrick Clay believe Erebor could fill the vacuum left by Silicon Valley Bank.
Stivers said existing tech companies will now learn more about what Columbus has to offer and predicts more tech startups could appear in the state. Clay expects those existing companies may look at putting down roots in the region as well.
“That is naturally going to bring competitors such as Boeing and Lockheed Martin and others to the region,” Clay said. “And I just think that the bank that they have proposed to bring here is going to make central Ohio very unique. It’s going to make it special.”
Clay said Columbus is now becoming a magnet for the next generation of innovation in finance and technology.
Stivers and Clay haven’t spoken to the Erebor’s organizers directly.
Stiver attributes the decision to headquarter Erebor in Columbus to the “safety” of Ohio’s bank charter and the conservative nature of the regulators that regulate Ohio and Midwest banks.
“I think that’s really important for the safety and security of Erebor as an institution and about making sure that we can have a sustainable engine to finance this tech growth, not just in Ohio, but around the country,” Stivers said.
Stivers said central Ohio needs to work on adding more housing and upgrading its electricity grid to meet the demand that new tech companies could bring to the region. He said bluntly that the region is “not ready” but work is being done to get central Ohio ready on these fronts.
