On Tuesday 21 July, Augustus announced $180m at a $1bn valuation to build a clearing bank for dollars.

The same day, Stephen Lybarger at the OCC signed a decision letter on Wise's application for a national trust charter.

The two companies have roughly the same pitch. Help institutions move dollars across borders, faster, cheaper, on better technology. One is a German startup with a 25 year old CEO and no US banking history. The other moved $243.5bn for 19 million customers last financial year.

Guess which one got the yes.

It wasn't Wise. That's the first time the OCC has publicly said no to a fintech's charter application in a year where it's said yes more than two dozen times.

Augustus filed on 18 December and had conditional approval by 8 May. Under five months. Wise filed in June 2025 and got its “no” thirteen months later. Meanwhile, Erebor, the Palmer Luckey founded bank, filed on 11 June 2025, the same month as Wise. It was chartered, insured, open and holding a billion dollars of deposits before Wise heard back.

It’s easy to assume that a clean sheet of paper was actually a better position than a decade of operating internationally, warts and all. That's half right, but it misses the thing that decided it.

In a world where new charters are being handed out more readily than ever before, each of these companies is worth examining. There’s a lot we can learn from doing so.

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The pitch is compelling.

If you're a fintech in Brazil or a bank in Vietnam and you need dollars, you reach them through one API, and they’re a bank. The alternative today means either a legacy correspondent bank with worse tech, or a middleware provider sitting on top of those same correspondent banks, which adds cost. Getting a relationship with the biggest banks in the world is rare until you hit Wise or Airwallex scale.

The Augustus equation: Get closer to the metal, cut out the cost.

All you need is a charter.

Showing up with a 25-year-old CEO and expecting an OCC charter was a wild concept even two years ago. And while this management team is anything but inexperienced, they're also going after the riskiest bit of finance.

Sending money across borders is hard because banks must move cash through systems they don't own, under laws they can't control, to partners they can't fully trust. Compare that with a domestic transfer, where the Fed or TCH clears in seconds. Correspondent banking relies on a chain of banks, each in a different country, each with its own laws and its own quality (or lack thereof) of compliance sophistication.

If a customer in London wants to pay a vendor in Tokyo, the money often passes through an intermediary bank in New York to convert the funds. Every stop slows the movement, adds a fee, and adds a chance of error.

And can we talk about the fines? Banks make up 6 of the top 10 most fined companies in history, across every kind of misconduct. Narrow it to money laundering and it's still eye-watering. TD Bank paid $3.09bn in 2024 and became the first US bank in history to plead guilty to conspiracy to commit money laundering. It had failed to monitor $18.3 trillion of customer activity.

So in walks Augustus, saying "hold my Celcius, we got this."

Augustus calls itself an "API-first" clearing bank built for fintechs and financial institutions transacting internationally. They're going straight at correspondent banking, and they're not subtle about it. Their own line is that the clearing model runs on legacy correspondents closed 115 days a year, built for humans, taking two days to settle. Co-founder Ferdinand Dabitz put it as "legacy banks are made of paper, Augustus is made of code."

Well, I guess we’ll find out if that’s a good thing.

I had three concerns about Augustus.

They've answered the first two better than I expected.

The leadership team is stacked, and stacked in the right direction. President Greg Quarles spent 18 years at the OCC as a commissioned National Bank Examiner and Assistant Deputy Comptroller before running Green Dot Bank, United Texas Bank and H&R Block Bank. Chief Compliance Officer Benjamin Alexander came from Column, and JPMorgan and HSBC before that. Andy Riggs joins as chief credit officer from Western Alliance. The CEO also told me that Ro Spaziani, former Managing Director and Head of Bank Regulatory at Goldman Sachs, just joined.

Quarles has said the advisers told the founders a charter application would need a banker who understood both regulation and innovation, and that's who they went and hired.

That matters more than it sounds. The OCC isn't assessing a business plan in the abstract. It's assessing whether the people filing it have ever sat on the other side of the table.

They're already regulated in Europe, albeit at a lower bar. Augustus started life in Berlin as Ivy, and runs its regulated business through Ivy Pay Oy, an Authorised Payment Institution licensed by the Finnish FIN-FSA and passported across the EEA. Note the acronym. In Europe, API means Authorized Payment Institution, while not a bank, it can do almost anything you need from a bank. It's Open Banking rails into thousands of banks across Europe, virtual accounts, named vIBANs plus SEPA Instant access (yay, Europe has functioning infrastructure). Useful, real, and running in production on their core banking system Marble for a couple of years now.

Their approach isn't like-for-like with large banks. They run a proprietary core called Marble that handles round the clock settlement across SWIFT, ACH, SEPA and stablecoins. In Europe they're not really doing correspondent banking at all, they're doing instant rails off that core. Kraken is already a customer.

Then there's supply and demand.

I think there's a real need for a global dollar bank. On the demand side, middleware like Airwallex and Wise gives you a better developer experience and a lot of other value, in return for higher cost. The largest correspondent banks won't talk to you until you're in the $50m revenue range and can show real sophistication.

On the supply side, nobody's had a proper swing at this in a while. The closest modern examples are ClearBank and Banking Circle, and where they stop tells you where Augustus is trying to go.

Either is a great answer for a fintech today (and could be better options with their own OCC charter). However, Augustus wants to be something else. It's going for a full-service national charter and direct central bank clearing from day 1, which is a far more brutal requirement. If they pull it off, they have a shot at being an order of magnitude bigger than the current players, which does make you wonder whether ClearBank and Banking Circle now have a real shot at the same thing, and that would be interesting, wouldn't it?

The real USP is stablecoins plus a modern core plus instant local clearing in the US and Europe.

Writing this, I kept thinking you could cluster Erebor in with Augustus. Both have Thiel in the cap table story. Dabitz is a Thiel Fellow, Ivy took early money from Valar Ventures, and Erebor is backed by Founders Fund.

They're playing very different games.

Erebor is a modern SVB. Augustus is a modern Citi. That's the clean version, and mostly true with a minor exception

Palmer Luckey calls Erebor a farmers' bank for tech, catering to defense, AI and crypto founders that traditional institutions turn away. Deep sector penetration, domestic balance sheet strength, lending against messy tech risk. Live, chartered, FDIC insured. Which proves the de novo path works if you put people the regulators already know in the room.

The growth is genuinely staggering. Erebor's first call report showed $1.1bn in deposits at 31 March 2026, gathered in seven weeks. Bloomberg reports that figure reached $4.05bn by the close of Q2, with around 400 new customers, and the bank in early talks to raise at $8bn or better. Luckey says none of the quarter's deposit growth came from his own companies.

For a bank that opened its doors on 8 February, that's a hell of a first six months. (Although I should note that’s mostly wholesale deposits from larger companies, not retail consumers).

Then there's Venezuela.

Erebor has signed a non-binding letter of intent with Banco de Venezuela to provide correspondent banking services, with a co-founder making multiple trips to Caracas earlier this year. Venezuelan outlets reported the arrangement as agreed in May. The structure on the table is correspondent lines into Venezuelan banks plus sub-accounts for their clients.

The domestic bank is doing cross-border, in one of the highest financial crime risk corridors on earth, five months after opening its doors.

It's legal, and the reason it's legal matters. On 14 April, OFAC issued General License 57, authorizing a broad range of financial services involving Banco de Venezuela, Banco del Tesoro, Banco Digital de los Trabajadores and the Banco Central de Venezuela. The perimeter moved.

Erebor moved with it, faster than any incumbent would.

And mostly, I imagine, because their defense-sector clients (and perhaps oil and gas) needed them to.

None of this is happening quietly. Senator Elizabeth Warren has been writing to the OCC, the FDIC and Luckey since February, asking about an investor memo that reportedly told backers Luckey's political network would help secure the charter. Luckey has denied the bank was approved rapidly, and denied ever saying his network would deliver a charter.

And the fact is today, they’re regulated, to the highest bar. The path to charters is now open, but the path to enforcement hasn’t closed.

So hold that thought, because the OCC just denied a charter to a company on money laundering risk.

Wise wanted to settle dollar payments directly with the Fed, something it already does in 8 markets, including Australia, Philippines, Brazil, Japan, UK, EU & Singapore. It applied in for its charter in June 2025, and the logic is simple. As the CTO and US President told me at last year's Fintech Nerdcon (emphasis mine):

That's the goal here. Ten times cheaper, per payment, forever.

Then, less than a month after the application went in, the consent order landed.

On 9 July 2025, Wise US was hit with a multistate consent order over its Bank Secrecy Act and AML program. Deficiencies in investigating and reporting suspicious activity, transaction monitoring data integrity, late filing of suspicious activity reports, and a failure to fix things earlier examinations had already flagged. Wise paid $4.2m across the participating states, plus a separate California order. It has since strengthened the program and says so, at length.

Which gives us two versions of what happened next.

Wise's version is about the Fed. Per Reuters, the company said the OCC denied its application as incompatible with the Federal Reserve's new policies for payment system access, and that with the Fed generally pausing account access for uninsured trust banks, the approach in its application became non-viable.

Then there's the letter itself, signed by Stephen Lybarger on 21 July. It doesn't mention Fed access once.

What it does say is that the organizers are part of long-standing AML/CFT deficiencies at Wise US, that they failed to select appropriate directors and management officials with sufficient experience, and that the proposed management and board have demonstrated a "persistent inability to sufficiently manage the risks presented by the bank's proposed activities." It also notes Wise US has no historical experience with fiduciary activities, which matters rather a lot when you're applying for a trust charter.

The line that should worry every fintech reading this is the one about the bar.

Wise US is supervised as a money services business. A national trust bank sits under stricter federal requirements. The OCC's point is that Wise US has a record of failing to comply with the lower MSB standard, so it can't conclude Wise would meet the higher one.

Both explanations can be true. Only one of them is the regulator's.

Wise has spent the best part of a decade lobbying for, and building toward, central bank access. It is now the cautionary tale in a boom it helped create.

I can't help thinking Wise has been on the field so long that the game tape counted against it, while the de novos have nothing to point at except a management team the regulators already like. That's not quite fair as a description of what the OCC did. It's exactly what the incentives now reward.

And it's worth remembering what Wise actually is, because the consumer app undersells it badly.

Wise is a serious cross-border player.

Against Citi, the largest cross-border bank in the world, Wise now clears about 60% of Citi's quarterly cross-border volume. Read the trend rather than the gap. Across the fourteen quarters on that chart, Wise is up 114%, from about $32bn to $69bn a quarter, while Citi is up 38%, from about $83bn to $115bn. One of those lines is a growth business. Wise serves at least 100 partners (like Standard Chartered, Nubank and Morgan Stanley) as a primary cross-border supplier. For Wise, their unit economics are everything, and they’re the biggest non-bank competitor for cross-border flow anyone is going to face.

They're also my operating account for my podcast business (handy if you get paid in dollars and work mostly from the UK).

Wise's real asset was never the charter. It's a decade of central bank relationships, bank partnerships, licenses in 48 states and four territories, and scale built on genuinely low-cost infrastructure. That's a moat that's much harder to build than a charter, and much harder to buy.

An OCC charter doesn't give you a Federal Reserve master account. It makes you eligible to apply for one.

Those are very different things, and the gap between them got a lot wider this year.

On 20 May, the Fed published its proposed framework for "payment accounts", the skinny master accounts Governor Chris Waller floated last October. The idea is that non-banks could get access to central bank payment systems. Yet in the same notice, the Board encouraged Reserve Banks to temporarily pause decisions on access requests from Tier 3 institutions until the policy work is finished.

Uninsured trust banks are Tier 3.

Wise's proposed entity was an uninsured trust bank.

So even a granted charter would have handed Wise a locked door.

In fact, there were a whole host of banks and non-banks who were trying the Tier 3 or state-chartered route to a master account, whose mortal sin appears to be only that their timing was bad, and they applied before the Trump administration unsealed the door to FDIC-insured and OCC-chartered banks.

This is why charter type is the whole story, and why the Augustus and Erebor comparison to Wise isn't apples to apples.

One firm has got through to master account status before the blockers went up.

Kraken Financial holds a limited purpose master account from the Kansas City Fed, granted in March, the first crypto firm with direct Fedwire access. Kraken is also Augustus's flagship customer, which means the customer got to the Fed before the bank did.

Isn’t that an interesting wrinkle?

Except it still isn't live. Kraken's CEO told Congress recently the account isn't operational yet. Payward must have some 4-leaf clover stashed somewhere. It just hasn't sprouted.

Wise has the infrastructure and didn't have a management team the OCC felt good about. Augustus has a management team the OCC feels good about and is starting near zero on infrastructure and liquidity. Erebor has both, and is using them to walk into Caracas.

The question I keep coming back to is how this new crop gets from zero to one over the next decade, and whether they end up taking share from Wise and Airwallex or from Citi and JPM.

Maybe both.

After a drought that lasted most of two decades, conditional approval has not been this available in a generation. If you've been waiting for the window, it's open.

Getting the charter is step one. Getting the Fed to answer the phone is step two, and running and operating a bank is step 3 and by far the hardest. The OCC is still an incredibly high bar, whichever administration is in.

The work starts the day you go live.

And never stops.

ST.

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(1) All content and views expressed here are the authors' personal opinions and do not reflect the views of any of their employers or employees.

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