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Palmer Luckey: Why I Started My Own Bank
Palmer Luckey says Erebor will serve deep-tech firms with conservative banking, direct control and dollar-backed stablecoin settlement.
TBPN · John Coogan & Jordi Hays
- Palmer Luckey is founder of Oculus and ModRetro, launching Erebor.
The best minutes
- 0:45Erebor is built for deep tech and always-on dollar settlement3 min
- 7:20A bank charter keeps key decisions under the company’s control2 min
- 19:04Vision Pro brought future display economics into the present3 min
Also worth watching
- 3:32Erebor wants to prevent fraud through early agency cooperation2 min
- 10:47ModRetro is stockpiling the M64 before launch2 min
- 16:41Vibe coding lets hardware founders focus on their strengths2 min
Skip the legacy-hardware and memory discussion, the Oculus cofounder stories, and the motorcycle-collecting and Hawaiian-shirt close.
Full analysis · 6 min read
Real Alpha · Nov 8
Palmer Luckey says Erebor's charter keeps decisions in-house
- Luckey says Erebor has its own charter and targets deep-tech and hard-tech businesses.
- The charter puts key decisions inside the bank, but the episode does not establish lower risk.
- Founders should test settlement terms, risk evidence and financing demand before shifting balances.
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Read the rest of the analysis
7 sections, the 3 other voices it tests Luckey against, and what it means for you. Every episode we cut gets one.
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Round-the-clock settlement may open doors, not lock customers in
Erebor's advantage is meant to begin with round-the-clock dollar settlement, not a broad promise of better banking. Luckey says dollar-backed cryptocurrencies can support that service for companies working in deep tech, hard tech and energy.
The precise timing figure is unclear in the transcript, so the clear point is continuous settlement. The episode gives no uptime terms, payment volume or customer count.
For example, a company making payments outside ordinary banking windows could benefit from continuous settlement. But founders need to measure whether timing actually delays suppliers, payroll or collections before treating it as a bank-switching reason.
Luckey also says network effects may be short-lived, since he thinks other banks will probably adopt stablecoins. So settlement may get Erebor considered without keeping customers once competitors offer similar rails.
Our read
The useful promise is faster access to dollars, not a lasting network advantage. Founders should ask whether payment delays cost enough to justify changing banks.
A charter makes Erebor answer for its own decisions
Luckey's charter case is about where decisions and accountability sit. He says customers relying on another bank or payment company can be removed from its platform. That dependence may cover infrastructure, risk management and licensing.
Erebor sought its own charter so it could control more of those decisions and take responsibility for them. That means owning the consequences of whom it serves and excludes, not that every decision will be wise.
For example, Luckey pointed to Steam, where he said banks and payment processors could pass responsibility for game censorship along the chain. On Founders in October 2026, Nik Storonsky said Revolut's late license made approval harder after it reached millions of customers.
Storonsky saw licensing as essential to earning trust and reaching scale. His account supports licensing as a trust and growth condition, not proof of superior risk decisions.
“the buck doesn't stop with you”
Our read
The charter shifts decision rights closer to the customer relationship, but not necessarily the quality of choices. The test is whether Erebor publishes and follows standards customers can inspect.
The interview gives no risk figures
Luckey says he wants a very conservative, low-risk bank and says Silicon Valley Bank's failure made him serious about building one. He says SVB had been doing a reasonable job for his businesses before it failed.
His caveat matters. He says even a conservative bank may not survive a total financial collapse. Yet the interview provides no capital, liquidity, concentration, deposit protection or stress-test figures.
At 10:14, Luckey points listeners to Erebor's applications and says some details are public record. So information may exist elsewhere, but the interview does not let viewers evaluate it.
Risk metrics matter more than the adjective conservative, especially for a bank asking operators to entrust it with balances. The source to check is broader than this conversation.
Our read
Luckey's qualification about systemic failure is important. The episode establishes an ambition to reduce risk, not a demonstrated safety advantage over other banks.
Fraud cooperation could attract customers, but raises process questions
Luckey says Erebor will work with the intelligence community from the outset to help make fraud almost impossible on its platform. He expects legitimate customers to value that cooperation and fraudsters to go elsewhere.
That is a customer-selection theory, not an outcome the episode can verify. The interview does not describe account-access boundaries, review processes or routes to correct mistakes.
Luckey also places Erebor explicitly alongside U.S. interests and authorities. That may appeal to companies seeking anti-fraud controls, while making policy details important to others.
So ask what cooperation means in routine account handling, information use and disputed transactions. A tough anti-fraud posture is not a substitute for clear, accountable procedures.
Our read
Fraud controls could matter to customers, but the interview leaves their operation unclear. A bank's willingness to cooperate is not a substitute for transparent processes.
Product priorities still depend on customer evidence
Luckey says the product roadmap will follow customer feedback, rather than a preselected full-service bank menu. He names equipment financing, handled conservatively, among offerings customers want.
He says residential mortgages probably will not be a priority. Take equipment financing as a test case. Can Erebor provide useful terms without creating the risk it says it wants to avoid?
The episode gives no pricing, loan limits, launch sequence or customer commitments. On Latent Space in October 2026, Paul Copplestone described comparing customers who received sales help with a control group.
That is a measurement example, not evidence about Erebor. A roadmap built from customer requests still needs proof of actual usage and results.
Our read
Customer requests can shape a roadmap, but they do not prove a product works. Erebor would need evidence that financing solves a real problem and attracts repeat business.
A specialist bank still has to earn trust
A specialist charter does not by itself make an unfamiliar bank trustworthy to finance teams. Customers need an operating experience and proof that fit their own stakes.
On Upstarts in July 2026, Shiv Rao said Abridge chose a conversation-first approach to challenge Microsoft and earn trust with health-system leaders. Healthcare and banking differ, so that story cannot validate Erebor.
But it illustrates how a product distinction has to become credible to its buyers. Here, the charter is structural differentiation. Service reliability, transparent controls and useful financing would have to make it felt.
Luckey says the bank will prioritize customer feedback, but gives no customer count or satisfaction measure. Founders still need evidence from the service itself.
Our read
A charter may help establish confidence, but it cannot do the whole job. Erebor still has to show a clear product advantage and make it credible to customers.
Operators should test the service before moving balances
For treasury teams, the decision is not whether Erebor sounds aligned with hard tech. It is whether it improves a real workflow without adding unacceptable risk.
Measure settlement timing, reconciliation exceptions and response times against the current setup. Request the relevant risk policies and ask how account decisions are reviewed.
Then test a limited workflow before changing where critical balances sit. Luckey says Erebor has only just opened, so this episode cannot show how it performs over time.
The conversation gives no dates for product launches or published risk thresholds. That makes staged evaluation more defensible than treating an origin story and a charter as evidence of operating performance.
Our read
Erebor has a reason to enter a founder's shortlist, especially where settlement timing or specialist financing is a problem. The episode does not establish it as a safer home for operating cash.
What it means for you
- Map payment delays. For one quarter, record payments affected by banking windows and the work needed to reconcile them. Compare that cost with Erebor's settlement terms before treating always-on rails as valuable.
- Request risk details. Review Erebor's public applications, which Luckey says contain some public-record details. Ask for comparable capital, liquidity, concentration and stress-test information before moving critical balances.
- Test financing demand. List planned equipment purchases and the financing terms or service gaps your team faces. Use that list to assess whether a specialist bank fills a real need.
- Set switch gates. Define the settlement, support and fraud-control evidence required before moving operating balances. Review actual performance against those measures in a limited evaluation first.
What to watch
- Whether founders can find comparable capital, liquidity, concentration and stress-test information in Erebor's public applications or elsewhere.
- Whether other banks adopt dollar-backed stablecoin settlement, which Luckey thinks will probably happen and could shorten Erebor's network advantage.
- Whether Erebor publishes clear operating terms for round-the-clock settlement.
Send this to the CFO or treasury lead evaluating bank concentration.
Watch the minute where Luckey explains why Erebor sought its own charter
Written by Real Alpha from the episode's transcript and the other moments it links, then checked against the transcript. Quotes are the speaker's exact words.
Minute by minute
- 0:21Erebor targets deep-tech businesses
Luckey says Erebor received its charter and became operational. He says he had considered starting a bank for his own businesses, which existing banks did not understand, and that Silicon Valley Bank’s collapse made him more serious about it. He wants Erebor to serve deep tech, hard tech and energy companies with conservative banking and dollar-backed stablecoin settlement.
- 3:32Luckey wants a U.S.-aligned bank
Luckey says Erebor plans to work with the intelligence community from the start to make fraud harder, rather than responding only to court orders. He contrasts that approach with banks exposed to foreign markets, saying Erebor will comply with U.S. law but not with rulings he views as lacking jurisdiction or authority.
- 5:52Erebor wants its own charter
Luckey says Erebor will prioritize products based on customer feedback, including conservative equipment financing, rather than residential mortgages. He argues that its own charter gives it control over key infrastructure, risk management and licensing, and makes it responsible for decisions such as debanking. He says Erebor will also have a physical vault.
- 10:47ModRetro is stockpiling the M64
Luckey describes the M64 as a tribute to the Nintendo 64 that will play classic games, including rereleases and previously canceled titles. It is in mass production, but ModRetro plans to build up stock before launch after the Chromatic sold out. Luckey says the company has stockpiled tens of thousands so far, and that the console’s small memory requirements help it avoid current consumer-hardware supply constraints.
- 15:32Luckey says gaming shifted to extraction
Luckey says the gaming industry has moved from innovation to extraction, with making money taking priority over pushing boundaries. He plans to introduce his children to classic games as a foundation and says he will not put them into the microtransaction-heavy games he compares to gambling.
- 16:41Vibe coding helps hardware builders
Luckey says hardware builders could benefit especially from vibe coding because they can use AI to build software without becoming programmers. He says his strengths were optomechanics, electrical work and product integration, and that spending more time learning to code might have put his work behind.
- 18:25Luckey says VR is not collapsing
Luckey says reports of Meta retreating from VR overstate the effect of its layoffs: he describes the cuts as pulling six months of normal churn forward and says Meta still spends more on VR than anyone else by an order of magnitude. He says Meta is shifting resources away from failing efforts, not reducing content spending. He expects smaller, lighter headsets with high visual fidelity and remains optimistic about VR.
- 23:18Luckey says cofounder choices matter
Luckey says he started Oculus alone at 19 and has learned from being betrayed; he would make different choices about collaborators today. He describes founder status as fluid and says he would like a blockchain record of a company’s founding story. He is glad to share the cofounder title with some people, but not others.
- 26:17Luckey collects commercial failures
Luckey says he received one of the first Jetson One eVTOL aircraft deliveries. His motorcycle collection centers on commercial failures, including a Honda Rune he describes as an ambitious cruiser built with little regard for price. Asked about flying the Jetson One, he declines to discuss it because of the regulatory climate.
Published Feb 20, 2026.
Transcript · 27 min read
TBPN, hosted by John Coogan and Jordi Hays, with Palmer Luckey.
From the transcript TBPN publishes with the episode.
We have Palmer Luckey in the restream waiting room. Let's bring him in to the TVPN UltraDown. Palmer, how are you You are doing? Live. You are live, sir. Can you hear us okay?
Yep. I hear you loud and clear, though, with a little bit of delay. So we'll try to keep Oh, it zippy.
Well, we're gonna say probably five words in total and you're just gonna go crazy. Tell us what's happening.
Read the whole transcript
Tell us what's happening. So, I mean, Trump is complaining about tariffs. Yes. Iran is on the brink of war. Yes. And Erebor, the the the new the the new bank for the tech community building things that actually matter, has officially received this charter and become operational. So it's a pretty good set of things that are going on. Big hit. Congratulations. Big hit.
“you can at least be the last man standing.”
“we're preemptively going out there and saying, no. We're gonna work with them from the very, very beginning to help make fraud almost impossible on our platform”
How do you think about rolling out products? A bank can do everything from mortgages to equipment financing to venture debt to capital raises, take someone public. That's kind of what you know, you go to a big bank, they're gonna help you IPO.
What do you wanna do first? That I right now, you know, we we look, we've just barely opened, so give us a little bit of time. The products that we are prioritizing are based entirely on the customer feedback that we're getting, the things that they tell us they need, the things that they tell us that we can most help with. In a way, the existence of a bank to me is almost this antiquated thing. Like, you you would hope that companies could really just do all of this stuff themselves or at least most of it themselves, But the the regulatory climate, the way that the banking system works requires that you have this intermediary in the form of a regulated bank to make these things happen.
And so I I kind of just think of our business as part and parcel of these companies that need us, and we're gonna work very, very close with them closely with them and focus on the things that they care about. That's probably not going to be, for example, you know, residential mortgages, but things like equipment financing, very conservative, you know, very conservatively played where it's not gonna turn into a risk management problem, allowing them to work with the legacy banking system and plugging into that in the least painful way. These are things that we have a lot of customers who are very interested. Oh, and we need to not lose their money. Yeah.
If we can do that, we'll be doing better than many other banks. Yes. Yes.
“if you don't control your own charter, if you don't control your own destiny, the buck doesn't stop with you and you're always gonna have to keep other parties happy.”
Physical branches. How are you thinking about that?
I think we're gonna start with Fort Knox, and we'll expand from there. I like it.
Yeah. Maybe actually dive deeper there. Like, what is a bank these days? I think most people can conceptualize, like, setting up a crypto wallet that holds coins. But when you wanna hold real dollars, you don't actually have a physical bank vault, I imagine. So once you get the charter, does that just give you the ability to, like, maintain a database and a ledger? Like, what is a bank?
What is a bank? I mean, there's lots of forms it can be. I think if you want all the details, you can actually read through a lot of our applications. Some of it's actually a matter of public record and you can see that. Andoril will sorry. Not Andoril. Erebor will have a physical vault. Oh, And we will have a lot of treasure in it. So Okay. We are not trying to be a pure digital, pure Interesting. You know, pure ether company. In fact, a lot of the companies that are very interested in working with us want us to have secure actual vaulted storage. I'm not saying that that's going to be the first thing that we focus on or that's our key differentiator, but we are not a we are not a bank of the ether. We are we are we are we are we are of TerraFirma.
“And so what we wanna do is not let down our developer partners this time and make sure that we maintain stock.”
Gamers are rising up.
You know, the supply chain is okay because of the type of hardware that we're building. Sure. There's a lot of consumer hardware right now where people are trying to buy memory and it's a huge problem. But remember that the Nintendo 64 doesn't have exactly a lot of memory. You know, it had the what was 16 megabytes by default, 32 megabytes with the expansion pack. And so it turns out that you don't need that much memory Yeah. To perfectly replicate the Nintendo 64 original hardware. Can you Maybe it might be it might it might it might be actually the least impact less the least memory impacted consumer electronics product of the year.
And so this was this was your plan then all along. Yeah. You saw this AI boom was coming and you said, I'm gonna make the the final console.
Yeah. Now we gotta return to monkey. We got we gotta go to go back to the beginning. I mean, really, what am I doing here with some with 32 megabytes of I mean, you you remember what you remember what Bill Gates said. Right? What what was it? 64 kilobytes of RAM ought to be enough for anyone? Yep. Let let let's let's let's figure out how to use AI to yeah. Let's figure out how to use AI to build applications that fit within reasonable memory footprints. Oh, yeah. I'm only half kidding. I I think you might have seen me going back and forth with Shamath on Twitter Yeah. Couple weeks ago talking about how the this AI software platform for building building software using AI should definitely support export to Windows XP Service Pack three compatible applications. And I really am only half kidding.
There there is actually a lot of government hardware that is still running those, financial hardware that's still running these, mostly offline stuff. Yeah. And so having apps that can run on those is actually useful. But, man, it feels crazy to need a few gigabytes of RAM to have a start menu. It feels pretty crazy that you need 16 gigabytes of RAM to take thirty minutes to search through a bunch of text files. Surely, we can do better than this.
Can you talk a little bit about how you think about gaming in the concept of just raising the next generation kids? I have three three kids, and Right. I think I could probably get an emulator and run it on an iPad and slam that over to my kid's face. And he might not know the difference, but is there another angle to the m 64 that is about, like, some of the some of the things that you can't do with it are actually good Sure. For the world, maybe?
I mean, you have to remember that the gaming industry, like many industries, figured out what actually worked a long time ago. They figured out how to make fun games. They figured out to make things that make people keep coming But it's moved from innovation to extraction. And I will note, I stole that line from Nirav Patel, founder of Framework, because he put it so much better than I did. But there's these industries that have moved from innovation to extraction. And they're now in extraction phase where they try to make tons and tons and tons of money, and actually pushing the limits is not the top priority for some huge majority of the dollars that are in industry. And so there's a lot of stuff that you can learn, especially when you're learning it from the ground up by going back to when people were just getting the basics right, when they were still innovating, building things that were really compelling to people. I I recently had a kid. I I might have a second on the way. I'm planning on starting them with I would don't even if I'd say the classics.
This isn't like a vintage play. It's it's starting them with a good foundation. That foundation happens to be largely old games. Yeah. But I am not gonna be throwing them into the slot machine micro transaction gamble rama that is dominating kids games today. It just seems like a like a like a crazy thing to do.
“I was only able to accomplish what I accomplished because I focused on what I was good at”
But it doesn't feel like the industry's embraced that at all. And everyone's sort of writing down their investments and pulling back at a time when the display technology does seem to be good enough for that narrow use case if you cut out the weight and move things around. But where do you see this where do you where do you want consumer VR to go? And then where do you think it actually is going?
“The samples cost about a thousand dollars each because the yield on that production line is only about 10”
I I I'm extremely optimistic. It's mostly just that when I when I try and pull stuff out of meta, they're like, no. No. No. We're not ready to talk. And I think that they're just being cold shoulder to me because, like, they don't wanna leak it yet. But I I am very optimistic. Problem is Yeah. They don't have a they don't they don't have a charming charismatic pitchman who knows how to talk about this stuff with you. They gotta solve that. They need to figure out what they're doing. You know, it reminds me of of of something being here. I'm on the floor of the New York Stock Exchange Yeah. Behind me.
Yeah. And back in the Oculus days, when we sold the company to Meta, one of the first things that happened was New York Stock Exchange emailed our contact info email, and they asked if I would come and ring the bell of the New York Stock Exchange. Sounds pretty cool. Right? Like, hey, like, you've been acquired by this major public corporation in the form of Facebook. Come and ring the bell. Maybe, you know, maybe someday you will do something else with you. And unfortunately, I didn't see that email for about seven years because another Oculus executive intercepted the email, said, oh, no. Palmer can't make it, but I would love to come. And he came and he rang the bell without And telling me about so I found out a bit about it later in unrelated litigation. That email came up in discovery.
And anyway, I'm I've I've not had a chance to ring the bell yet. Maybe when Andoril goes public, I'll finally be able to I'll finally be able to ring that bell. But I gotta admit, I have a I have a long memory and a long memory grudges, and I won't say who it was. Yeah. But but but but there's probably a handful of people out there, can guess.
You you you have a lot of cofounders now, a lot of executives that you work with. How do you select for folks who won't do that to you? How do you select Extreme loyalty. Extreme loyalty and trust. I don't know. I mean, it's important. Remember. We just kicked this thing off and let them go.
Look. I started Oculus when I was 19 years old. Yeah. And I I mean, it's you you also gotta remember the story of who is a founder, who is a co founder. It's it's it's fluid and dynamic and always changing with the ebb and flow of history. One of my ideas is to have a block chain company where everyone agrees what the founding story is and who the co founders are, and then it goes into the block chain so that nobody can come back and say that they're a co founder. There's a guy running around now who says that he's a co founder of of of Oculus who was very much so not a co founder and in fact swear I swear I think I met this guy. I told you this story. Fair. A guy tell me the story. I saw I met a I was at a dinner party at my friend's house and my buddy was like, hey, this guy works at I'm not gonna name the company, but you guys probably have some tech stuff in common you guys should meet.
And I got up to him, I said, hey, hi. I I hear we should meet. And he's like, hey, I I I was like, what's your story? He's like, I started a company called Oculus Okay. Now at now at Meta. And I was like, oh, interesting. Like, never heard of you before. And so it might it might maybe this guy here's the crazy thing. I don't even know who you're talking about. Well well, and and I told him was like, oh, like Because there's multiple people who are saying this, including a guy who literally has a documentary being made about him, how he's the founder of Oculus. So it's it's always I was like, oh, that's that's awesome. Like, Palmer comes on the show all the time and then he completely backs back backtracked. It was like it was like, well, yeah. Yeah. Yeah.
You know, I I joined like, you know, you know, and and but I was on the founding team. Like, he he he backtracked.
Well, look. You so so but dig to the point, you asked me how do you select these people? Carefully. I was 19 years old when I selected the first people that I was working with. I've learned a lot. I've been stabbed in the back a lot, and I'd probably make very different decisions if I were doing it today. And it's worth noting, remember that I started Oculus on my own with no co founders, nobody involved, and a lot of like, I brought on people that I am happy to call co founders even though they didn't join the company until months later who I had never met when I started the company. That said, I'm hap there's some people I'm honored to share the the title of co founder with, and there's other people that I'm not, which is why I really want this blockchain thing. Somebody needs vibe code this slop and get it out there.
Super important question. Have you played Federal Reserve Simulator yet? The new game It's on Steam. On Steam. You gotta try it out. You're a banker now. Heard of it. You're a banker now. We gotta get the reps really enjoy this. Alright. You gotta do it. Federal Reserve Simulator. Federal Reserve Simulator. I see.
Think I I there it's right there on the screen. It says, Trump says, we have an incompetent Federal Reserve chair who loves high interest rates. Very, very interesting.
What what hardware are you collecting recently? We we just learned you can buy a steam powered car and drive it around Jay Leno has one that's a 120 years old.
What hardware am I buying am I buying Collecting. Not just buying, collecting. Yeah. Know. What am I what am I well, so I I have a I there there's a few things I could bring up. To be honest, I've been too busy to buy really good stuff, but I recently got delivered one of the first Jetson Jetson ones, which is a small e VTOL aircraft. I was one of their first customers and their first delivery. I also have a collection of motorcycles. The theme of the collection is commercial failure. And so all of my motorcycles were huge commercial failures. The more of a failure, the better. And so I've been buying some some failed two wheel drive motorcycles.
I've How do they how do they military motorcycles. How do they ride? Oh, incredible. Look. Look. There's really bad failed motorcycles. There's those that failed because they're too good. One of the crown jewels in my collection is a Honda Rune. It was basically a personal project created by the CEO of Honda. The the document that they used when they were creating it has actually been leaked now. And at the start of the document, it says, performance is the only object. Price is of no importance. And so they wanted to build the ultimate cruising motorcycle. And the the story goes that they lost over a $100,000 per bike in the And so I've got one of the one of the handful of Hondaroons that made it out of that program, a beautiful Honda Honda room with a with with a couple thousand miles, metallic purple, and chrome. And it's it's it's one of my favorite motorcycles, if not the favorite. So Fact. Commercial failure doesn't mean a product's bad.
It just means they couldn't figure out how to make a business out of it. Sure. Sure. Back to your Jetson One. Have you been flying it? Are you taking it like half a foot off the ground and then a foot off the ground? What what is the path to commuting to work in it?
I think given the regulatory climate around eVTOL aircraft, it's best that I not say one more word.
Perfect. Perfect. Where do you where do you get your shirts? Where do I got my shirts? Well, it depends. I buy I buy Tommy Bahamas. This one is a Rainspooner Andoril Hawaiian shirt. So I've got a Century Tower. I've got a a ghost x on it. They're they're they're headquartered on on Catalina Island, California in Avalon. That's So I I buy a I buy I buy from a whole bunch of different places. I'm not I'm an equal opportunity Hawaiian shirt purchaser. I like
