HSBC has successfully tested the use of quantum-secure technology for the buying and selling of tokenised physical gold, marking a significant advancement in protecting critical financial applications from potential future quantum computing threats.
This milestone is part of HSBC’s ongoing efforts to safeguard digital assets using cutting-edge cybersecurity measures, according to a statement.
The global banking group first introduced tokenised physical gold to institutional investors in 2022, utilizing distributed ledger technology (DLT).
In 2023, HSBC expanded its offering to retail investors in Hong Kong with the launch of the HSBC Gold Token, which allows fractional ownership of physical gold. Both initiatives are powered by the HSBC Orion digital assets platform.
The latest development in HSBC’s digital gold service is the successful deployment of post-quantum cryptography (PQC) to enhance security during the transfer of digital assets across distributed ledgers.
This includes enabling the conversion of HSBC’s gold tokens into ERC-20 fungible tokens, improving the assets’ interoperability with other DLT platforms and digital wallets.
The trial focused on providing robust protection against potential quantum computing attacks, addressing both the evolving needs of clients and regulatory requirements.
In collaboration with Quantinuum, a quantum computing company, HSBC utilized quantum-safe cryptographic algorithms and Quantum Origin technology to fortify its digital assets against the threat of “store now, decrypt-later” (SNDL) cyberattacks.
SNDL refers to the tactic of stealing encrypted data now, with the intention of decrypting it later when quantum computers become powerful enough to break classical encryption methods.
This quantum pilot demonstrated the real-world applicability of advanced technologies in protecting digital financial services. The initiative underscores HSBC’s commitment to future-proofing its digital asset offerings in a rapidly evolving cybersecurity landscape.
As HSBC continues to innovate with quantum-resistant security measures, the bank aims to leverage these advancements to strengthen its digital services and secure its position as a leader in financial technology.
This trial is part of HSBC’s broader strategy to develop quantum-hardened defences that ensure the long-term protection of sensitive data and digital assets against emerging threats from quantum computing.
