“What I think is happening here is if this becomes a new franchise bank … the bank will offer this ‘cash, obfuscated cryptocurrency’ type of product to allow these institutions to be able to pay,” he said.
Andurier also knows how to sell to the U.S. government, and Ereber can use some parts of Andurier’s growth strategy, said Rory McDonald, a professor at the University of Virginia’s business school. In Anduril’s case, Palmer Luckey and his co-founders first targeted the U.S. government’s border security technology, identifying it as a “edge” part of the defense market. They provide “imperfect but good enough technical solutions,” and [rode] McDonald’s told Wired.
High-risk startups in Crypto, AI and Defense may be Erebor’s edge market, especially crypto companies. Signature Bank and Silvergate Bank (which failed around the same time as SVB) are also designed to measure the cryptocurrency banking market by providing cryptocurrency-centric services.
Stephen Marcus, co-founder and general partner of Riot Ventures, invested in certain industries in Erebor’s intended service, and said Erebor will soon have to speak out about its products and determine how it will “communicate stability” with potential business customers. “At the end of the day, these companies need to get liquidity, and they can’t afford to get cash,” he said. “The infamy of investors and the infamy of those who are starting it may help,” although they have to “earn” trust in their banking decisions outside of portfolio companies, thus making it easier to affect their banking decisions.
Of course, assuming Erebor goes further; for all deregulation that makes charter approval faster and more likely, regulators may think Erebor’s application is too unprecedented or risky on the system. According to Evey Guo, head of lobbying and consulting group FS Vector (founded by former chief compliance officer and general counsel for Circle), Erebor’s “novel elements” could cause “additional regulatory scrutiny that requires particularly strong controls”. Another banking expert said Erebor’s “one single mastoid” client profile could also attract attention due to the lack of customer diversity. Furthermore, Baker, a senior researcher in Colombia, argued that Erebor’s conservative approach to loans relative to the rest of the balance could suffer from a range across the scope, as the regulator may reject previous banking operations in sy shsing she dewend sheed sheed sheed sheed sheed sheed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed syed
Regulators asked Michele Alt to see the possibility of conflict between the cryptocurrency industry and incumbent banks, which are “two very powerful lobbies” that are after those charter applications. Organizations such as the American Bankers Association (ABA) and the Independent Community Bankers of the United States (ICBA) may attempt to take legal action or otherwise object to certain charter applications, as the ICBA recently “strongly” opposes Protego’s subsidiary’s attempt to enter the field in a letter to the OCC. The outcome of Erebor and the rise of Stablecoin banking depend on the litigation of the incumbent and the ability of the banking regulator to maintain certain integrity as an arbitrator in the multi-value banking system.
“We know [regulators] Are some areas that are consistent with current government policies, but I’m going to say, who would manage these banks if it weren’t for federal banking institutions? ” Alt said.
