Erebor is still on track to raise more capital.
The new digital bank for technology-focused businesses and startups is expected to secure $1.5 billion in another round of funding, according to recent reports by FT.
Some of the top stablecoin VCs supporting the growth of digital assets are set to participate, with a final date not confirmed.
Earlier last month, it was indicated that the valuation of Erebor in a new raise may be in the $8B+ range. The main narrative of this was a growth in net deposits held at the bank.
Erebor’s national bank charter application was officially approved by the Office of the Comptroller of the Currency (OCC) in February of this year. This was a few months after its initial approval was cleared and the U.S. Genius Act had passed.
At a time when community banking groups are starting to lose out to digital banking solutions, such as those provided by SoFi, private banks built on stablecoins are gaining momentum.
Stablecoin Banking
Stablecoins are allowing new-age banks to build banking over new rails.
While tokenized deposits focus on embracing blockchain technology to move existing customer deposits inside the bank, as well as with other banks, stablecoins allow for outside movement.
Additionally, integrating stablecoin infrastructure enables more native payment, invoicing, and transfer integrations with top stablecoins used in everyday payments.
This means that companies are no longer required to just rely on ACH, wires, or SWIFT payments to make 24/7 payments and transfers after banking hours.
EreborUSD
For Erebor Bank, this is also an opportunity to hold reserves for stablecoin issuers.
A recent transparency breakdown of Frax Finance and its current reserves showed that deposits held at the bank are around $2M and are denominated as EreborUSD.
However, offering stablecoin custody solutions is a niche market.
Currently, it is only offered by the likes of Anchorage Digital and BitGo. Other, more traditional options include legacy banks such as BNY Mellon, used by the RLUSD issuer Ripple.
