AI-powered bank founded by Peter Thiel protg wants to replace humans with code will it work?
A 25-year-old protégé of billionaire Peter Thiel has built an AI-powered national bank that’s mostly run by code instead of humans – a radical departure from the traditional banking system that has endured for decades.Augustus Bank – named after the Roman emperor – revealed earlier this week that it had received conditional approval from the Office of the Comptroller of the Currency, or OCC.That made Ferdinand Dabitz the youngest CEO to receive a conditional federal bank charter in more than 100 years.
In an interview with The Post, Dabitz argued that traditional clearing banks are built on “decades-old technology” and held back by human bankers – creating needless friction in the international banking system despite “infinite global demand” for the US dollar.“These legacy clearing banks, they’re made of paper, which means they’re very slow and it takes a long time to move money,” Dabitz said.“They’re closed on the weekends, they close after 5 pm.
In fact, there are 115 bank holidays a year.”Founded in 2022, Augustus is just the eight bank to receive a conditional charter from the OCC since 2010, according to Dabitz.Modernizing the western model of banking, he said, is crucial to ensure that the US, not Russia or China, maintains the gold standard internationally.Augustus will use stablecoins, which are pegged one-to-one with fiat currencies like the US dollar, to process transactions in real time.
Dabitz is a Thiel fellowship recipient, awarded to young entrepreneurs who drop out of college to build tech firms.Augustus’s buzzy announcement of its federal charter, which included an appearance by Dabitz on CNBC’s “Squawk Box,” drew a mixed response from banking experts.Dabitz rightfully points out some of the key flaws of the international banking system, according to Campbell Harvey, a Duke University professor and the author of “DeFi and the Future of Finance.”Decentralized financial institutions like Augustus prov...