The Hong Kong Monetary Authority (HKMA) has initiated a Quantum Readiness Index (QPI) for the banking sector, which has received an initial score of 2.3 out of 10.
Alongside this, the regulator has published a white paper detailing how financial institutions can prepare for risks associated with quantum computing. According to HKMA, 32% of the surveyed banks have yet to begin transitioning to post-quantum security measures, and nearly half lack a formal plan. However, about 68% of organizations are either aware of the risks or are in the planning and pilot project stages.
Approximately one-third of the respondents are exploring or piloting quantum initiatives, with around half having discussed the topic at the board level.
HKMA aims to elevate the sector's readiness to a perfect score of 10 by 2030. To achieve this, the regulator will develop tools for post-quantum cryptography in collaboration with the Hong Kong University of Science and Technology's business school and industry participants, as well as conduct training workshops.
The white paper warns that quantum computers capable of effectively applying Shor's algorithm could threaten widely used cryptographic methods, such as RSA and elliptic curve cryptography.
HKMA has urged banks to proactively inventory their cryptographic systems, assess risks, and devise migration plans, emphasizing that replacing built-in security mechanisms could take years.
Furthermore, the regulator has linked the preparation for quantum risks to the growing trend of tokenization in Hong Kong.
Since 2023, the Hong Kong authorities have issued three tranches of tokenized green bonds. The first tranche totaled 800 million Hong Kong dollars (HKD), the second approximately 6 billion HKD, and the third around 10 billion HKD, bringing the total to about 16.8 billion HKD.
In June, the regulator established a task force to promote the use of tokenization in the debt market. The HKMA also cited HSBC as an example, noting that in 2024, the bank tested quantum-safe technology for transactions involving tokenized gold.
It's worth mentioning that in July, Eddie Zervigon, CEO of Quantum Xchange, indicated that Bitcoin and other cryptocurrencies might be the first to face practical threats from quantum computing when the technology matures enough to compromise cryptographic systems.