Let’s face it, the failure of Silicon Valley Bank (SVB) had most every startup reeling with fear. For Asia, the lack of access to funding is already a huge barrier. A lot of people that SVB implosion seemed like yet another door slamming shut. What if an even bigger door, a gold mine of opportunity, were just about to swing open. Step in Erebor Bank, ICO-ed by some of the heaviest hitters in the tech world, and taking Tolkien’s legendary hoard as its name. Is this the unrealistic hero that Asia’s nascent blockchain startups have been seeking? I think so, and here's why.

Unlocking Potential Where Others Fear

Even the most “innovative” traditional banks are reluctant to engage with early stage blockchain projects. They see risk. Mountains of risk. But Asia, and in particular Southeast Asia is a hub of blockchain innovation. Specifically I have met in person with founders from the Philippines, Indonesia and Singapore. They’re creating amazing solutions, from cross-border decentralized finance (DeFi) platforms to blockchain-based supply chain management. Their biggest challenge? Access to capital.

Erebor, with its professed mission to serve “riskier” clients, might be a disruptor. Here’s a secret—it’s not about reckless lending, it’s about understanding the technology, the market, and the potential. It’s this culture of looking for the Smaug-sized opportunity through the clouds of fire.

Credit Access: A Lifeline for Growth

Put aside the shills and showboating of the venture capitalists. A true line of credit can be invaluable to a startup. This flexible financial tool allows for better cash flow management, business scaling, and funding gaps between rounds. Traditional banks – who fund much of our local economy – look for mountains of collateral and decades of operating history, therefore locking out young, innovative companies.

Erebor’s mission is to provide credit to businesses that have been overlooked by traditional financial institutions. This key risk mitigation approach can be a lifeline, particularly so in conservative lending pockets such as in Southeast Asia. Imagine an entrepreneur from Indonesia building a blockchain-based platform for farmers. All at once, it gets the working capital it needs to reach more people and have a larger, more positive tidal effect. And that’s not just good for the startup, it’s good for the whole agricultural ecosystem.

Stablecoins: Bridging the Traditional with Crypto

As we discussed last week, stablecoins are quickly becoming the nexus between the traditional financial world and the crypto economy. J.P. Morgan, Visa, Stripe – they’re all getting into the game. The regulatory environment remains complicated, and banks continue to be cautious about embracing stablecoins entirely.

Erebor’s professed goal to be the primary, regulated on-ramp and off-ramp for stablecoin transactions is enormous. This isn't just about facilitating crypto trading; it's about enabling cross-border payments, streamlining supply chains, and creating new financial products that are faster, cheaper, and more accessible. For Asian enterprises, especially those engaged in international commerce from Indian Ocean to Pacific Ocean, this would enormously lower transaction costs and increase direct efficiency.

Beyond Funding: A Network of Expertise

Money is important, but it's not everything. Palmer Luckey, Joe Lonsdale, and Peter Thiel’s Founders Fund offer more than just financial backing. Their support provides unparalleled experience and intentional networks. It brings with it a network of corporate expertise, connections and mentorship that can be invaluable to young startups.

Think about it: access to some of the brightest minds in tech, guidance on navigating regulatory hurdles, and introductions to potential partners and customers. This level of support is the difference between success and failure. This is particularly important in a complex and fast evolving space such as blockchain. And now, a young Filipino startup will have their golden opportunity to pitch their brilliant ideas to Peter Thiel. Even one opportunity like this one can dramatically shift the future direction of their startup.

A Response to SVB's Void: An Opportunity

With SVB’s collapse came a vacuum, an open chasm in the startup universe. Now, in the wake of SVB’s closing, Erebor is replacing that gap—but it’s more than just doing what SVB did. Close your history books and open your ears and eyes to the present. Together, we can create a financial institution that is really fit for the future.

The continent has become home to some of the globe’s most exciting and forward thinking blockchain startups. These companies have earned the right to access the funding and support they need to flourish. With its specialized niche focus and deep institutional backing, Erebor Bank is one of a kind. That would create huge potential and spur the next wave of blockchain innovation. Speculative and illicit activity is the biggest risk of all. The good news is we can control it if we put in the right framework and guardrails. The rewards to Asia’s blockchain ecosystem certainly outweigh the risks. This isn’t only a financial issue—it’s an opportunity, empowerment, and inclusive financial future issue. Let’s just pray Erebor does not become as bad as its namesake.