Hong Kong Prepares Banks for Quantum Threats

The Hong Kong Monetary Authority (HKMA) has launched a framework to assess banks’ preparedness for quantum-computing threats as the city expands its use of tokenized deposits, digital assets and blockchain settlement. 

On Monday, the HKMA introduced a white paper on quantum preparedness and the sector’s first Quantum Preparedness Index (QPI). The index gave the sector an overall readiness score of 2.3 out of 10, while the white paper found that around half of surveyed institutions had no formal post-quantum planning in place. The HKMA said it aims to achieve full sector readiness, represented by a QPI score of 10, by 2030.

The development comes as Hong Kong moves more traditional financial activity onto distributed ledgers. Government figures show that Hong Kong has issued three batches of tokenized green bonds totaling about HK$16.8 billion (about $2.1 billion) since 2023, while the HKMA is advancing tokenized deposits and digital-asset settlement through Project Ensemble. 

The HKMA white paper said distributed ledger applications and payment networks depend on cryptography for core functions and could face severe disruption if those protections were compromised. 

It also said one surveyed institution completed a proof of concept applying post-quantum cryptography to distributed-ledger connectivity and cited HSBC’s 2024 use of quantum-safe technology to move tokenized gold across distributed ledgers.

Hong Kong’s tokenization push raises quantum stakes

The quantum initiative follows the launch of the HKMA’s Fintech 2030 strategy in 2025, which made tokenization one of four strategic pillars in a plan comprising more than 40 initiatives.

The regulator said it would accelerate real-world asset (RWA) tokenization, regularize tokenized government bond issuance and explore tokenized Exchange Fund papers, with blockchain settlement supported by e-HKD, tokenized deposits and regulated stablecoins. 

Related: Hong Kong launches initiative to help banks with DLT adoption

In a Feb. 11, 2026, speech, Hong Kong Financial Secretary Paul Chan said banks in Hong Kong held more than HK$14 billion (about $1.785 billion) in digital assets under custody at the end of 2025, up about 180% year over year, while tokenized deposits had reached HK$29 billion ($3.7 billion).

According to the HKMA white paper, quantum computers capable of running Shor’s algorithm at scale could eventually break widely used RSA and elliptic-curve cryptography. This could allow attackers to decrypt protected data or forge the digital signatures used to authorize transactions, verify identities and establish trust in financial systems.

Because replacing embedded cryptographic systems can take years, the HKMA urged banks to begin inventories, risk assessments and migration planning before such machines become available.

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